November Industrial Production Slipped 0.6%

Industrial production in November decreased for the third time in the last four months, according to figures released Monday by the Federal Reserve. The month of November registered a 0.6% decline versus consensus expected -0.8%. October numbers were revised up to a 1.5% rise from the 1.3% previously estimated. Total industrial production in November was 5.5% below its level of a year earlier.

• Manufacturing output, which is down 7.3% versus a year ago, dropped 1.4% in November despite the resumption of activity in the commercial aircraft industry after last month’s strike.
• Automotive products dropped 2.6%, appliances, furniture, and carpeting fell 4.0%, home electronics moved down 1.7%, and miscellaneous goods declined 3.4%.
• The output of mines advanced 2.5% from last month’s 7.2% for a gain of 1.6% on year-over-year basis. November’s gains are as a result of a further post-hurricane recovery in oil and natural gas operations in the Gulf of Mexico.
• The index for information processing equipment declined 0.7%, its sixth consecutive monthly decrease. The production of high-tech equipment fell 1.9%, the weakest performance since the high-tech bust in fiscal 2001.

Overall capacity utilization rate for total industry shrank to 75.4% from 76% in October, a level 5.6 percentage points below its average level from 1972 to 2007. Manufacturing capacity usage decreased to 72.3% from 73.4% in October, the lowest level since April ’02.
Industrial production has been volatile over the last 18 months. During the 2001 recession, IP fell for 12 straight months.

Image: FRB

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