Industrial Production – Solid Growth

The industrial production report is always pivotal in measuring the economy. It’s especially important now that we’ve disconnected soft indicators from the hard reports.

It’s interesting that the September ISM manufacturing PMI fell slightly. However, industrial production growth accelerated on a year over year basis. It also beat estimates on a month over month basis.

The chart below shows the 3 month moving average of the leading economic indicators. It also shows industrial production are at near peak cycle growth rates.

Leading economic indicators were up 0.5% month over month. This matched expectations and were above last month’s growth of 0.4%. New records in this index imply a recession isn’t nigh.

Since the stock market is in this index, it should weaken slightly in October because of the correction.

Month over month industrial production growth was 0.3% which beat estimates for 0.2%. This was great growth since August had 0.4% month over month growth.

Manufacturing growth was 0.2% which met estimates. It was 0.1% below August’s growth. Capacity to utilization was 78.1% which missed estimates for 78.2% and was flat with last month.

Industrial Production – There is still slack in the economy which should allow it to expand further. 

Manufacturing utilization was up 0.1% to 75.9%.

Mining production was up 0.5% month over month and 13.4% year over year. Utility production was flat month over month and up 5.4% year over year.

Manufacturing volumes were up 3.5% year over year. Nominal production growth was almost 6%. Motor vehicles were up 1.7% in September and 7% year over year.

Hurricane replacement sales helped. Also, they will help next month because of Hurricane Michael. Hi-tech production was up 0.6% month over month and 6.9% year over year.

Materials production growth was 0.2% and 8% year over year. Business equipment growth was 0.8% and 3.6% year over year. Consumer goods production was up 0.2% and 2.5%.