And Another Miss: Industrial Production Contracts 0.1% On Expectations Of A Rise

First it was the Empire Mfg Index. Now it is the turn of Industrial Production which as the Fed just reported declined by -0.1% in October, a drop from the upward revised 0.7% increase in September driven by a -1.6% collapse in mining and a -1.1% drop in Utilities, while pure manufacturing rose a modest 0.3% in October, just above the 0.1% from September. And confirming the increasing slack, Capacity Utilization dipped once again, from the 78.3 in September, to 78.1 once again driven by a notable drop in Mining Capacity down from 90.5 to 88.7.

The lack of a pick up in the economy is shown below:

From the report:

The production of consumer goods decreased 0.1 percent in October after having increased 0.8 percent in September; in October, the index stood 2.5 percent above its level of a year earlier. The output of durable consumer goods fell 0.2 percent: Gains for home electronics; appliances, furniture, and carpeting; and miscellaneous goods were outweighed by a decrease in the index for automotive products, which nevertheless stood more than 11 percent above its year-earlier level. The index for consumer nondurables was unchanged, as a small increase in the output of non-energy nondurables offset a small decline in the output of consumer energy products. Among non-energy nondurables, gains for foods and tobacco, for clothing, and for paper products were partially offset by a loss for chemical products.


The output of business equipment rose 0.2 percent in October after an average monthly gain of 0.3 percent during the third quarter. The index for transit equipment declined 0.1 percent, the index for information processing equipment rose 0.2 percent, and the index for industrial and other equipment increased 0.3 percent. Over the past 12 months, the production of business equipment has advanced 5.1 percent, with similarly sized gains in each of its three major components.


The output of defense and space equipment rose 0.5 percent in October following gains of 0.8 percent in September and 2.1 percent in August. The index for October was 3.3 percent above its year-earlier level.


Among nonindustrial supplies, construction supplies recorded its fifth consecutive monthly increase; the index moved up 0.3 percent in October and was 6.6 percent above its level of a year earlier. The output of business supplies moved up 0.2 percent in October; despite having gained 3.0 percent over the past 12 months, the index was still about 8 percent below its pre-recession peak.


In October, the production of materials to be processed further in the industrial sector decreased 0.4 percent, a decline that was driven by a drop of 1.5 percent in the production of energy materials. The output of durable materials rose 0.3 percent, as increased production of equipment parts and other durable materials more than offset a decline in the output of consumer parts. The production of nondurable materials moved up 0.4 percent; textile, paper, and chemical materials each registered gains of 0.5 percent or more, while the index for other nondurable materials was little changed.

In short: the news today so far has been bad enough to validate the “BTFATH mentality” which means Kevin Henry’s 1800 price target on the S&P remains unchanged.


via Zero Hedge Tyler Durden

Leave a Reply

Your email address will not be published.