The headlines say seasonally adjusted Industrial Production (IP) declined. This month the manufacturing portion of this index was unchanged month-over-month – but the other portions of industrial production declined. This is another weak report, and again under expectations.

Headline seasonally adjusted Industrial Production (IP) decreased 0.3% month-over-month and up 1.9% year-over-year.

Econintersect‘s analysis using the unadjusted data is that IP growthdecelerated 0.3% month-over-month, and is up 1.9% year-over-year.

The unadjusted year-over-year rate of growth decelerated 0.7% from last month using a three month rolling average, and is up 2.5% year-over-year.

The market was expecting:

Headline Seasonally Adjusted Consensus Range Consensus Actual IP (month over month change) -0.3 % to 0.4 % +0.0% -0.3 % Capacity Utilization 78.1 % to 78.7 % 78.4% 78.2% IP Subindex Manufacturing (month over month change) 0.0 % to 0.4 % +0.2% +0.0%

IP headline index has three parts – manufacturing, mining and utilities – manufacturing was unchanged this month (up 2.3% year-over-year), mining down 0.8% (up 1.3% year-over-year), and utilities were down 1.3% (up 0.1% year-over-year). Note that utilities are 9.8% of the industrial production index, whilst mining is 15.9%.

Comparing Seasonally Adjusted Year-over-Year Change of the Industrial Production Index (blue line) with Components Manufacturing (red line), Utilities (green line), and Mining (orange line)

Unadjusted Industrial Production year-over-year growth for the past 2 years has been between 2% and 4% – it is currently 1.9%. It is interesting that the unadjusted data is giving a smooth trend line.

Year-over-Year Change Total Industrial Production – Unadjusted (blue line) and the Unadjusted 3 month rolling average (red line)