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The Fed's Industrial Production Report for November shows a rebound in production, and notably manufacturing.

  • Industrial production and manufacturing production both rebounded 1.1 percent in November after declining in October. These sharp November increases were largely due to a bounceback in the output of motor vehicles and parts following the end of a strike at a GM.
  • Excluding motor vehicles and parts, the indexes for total industrial production and for manufacturing moved up 0.5 percent and 0.3 percent, respectively. Mining production edged down 0.2 percent, while the output of utilities increased 2.9 percent.
  • Manufacturing output rose 1.1 percent in November after having been held down in September and October by the strike in the motor vehicle industry. An increase of 2.2 percent for durables primarily reflected a jump of 12.4 percent for motor vehicles and parts, but even excluding motor vehicles and parts, the output of durables moved up 0.6 percent. The indexes for primary metals and for computer and electronic products advanced 1 percent or more, while the indexes for nonmetallic mineral products, furniture and related products, and machinery declined modestly.
  • The production of nondurables edged up 0.1 percent, as increases for plastics and rubber products and for food, beverages, and tobacco products were mostly offset by decreases for petroleum and coal products, for chemicals, and for apparel and leather. The output of other manufacturing (publishing and logging) fell 1.9 percent.
  • Total industrial production was 0.8 percent lower in November than it was a year earlier. Capacity utilization for the industrial sector increased 0.7 percentage point in November to 77.3 percent, a rate that is 2.5 percentage points below its long-run (1972–2018) average.

Manufacturing vs Overall Production

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Manufacturing production is still 2.3% below the peak level reached in December of 2007. (Index levels 108.59 vs 106.09)

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This production and the associated jobs simply are not coming back.

Looking Ahead

The current rebound is artificial, but so is the strike that preceded it. Looking ahead, Boeing is going to have a significant impact in the first quarter.

Thousands of jobs and possibly as much as 1/3 of a point of GDP as Boeing Will Suspend 737 Max Production in January.

Mike "Mish" Shedlock