Sunday, May 21, 2017

April industrial production and new housing starts

regular monthly reports that were released this week included the April report on Industrial Production and Capacity Utilization from the Fed, the April report on New Residential Construction from the Census Bureau, and the Regional and State Employment and Unemployment Summary for April from the Bureau of Labor Statistics...the week also saw the release of the first two regional Fed manufacturing surveys for May: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index fell to -1.0, down from +5.2 in April, suggesting an end to growth of First District manufacturing... meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose to +38.8 in May from +22.0 in April, indicating a significant plurality of the region's manufacturing firms reported increases in their activity this month...

Industrial Production Up 1.0% in April

industrial production increased in April by the most since February 2014 on widespread increases among all its components, led by a 6.5% jump in motor vehicle assemblies...the Fed's G17 release on Industrial production and Capacity Utilization for April reported that industrial production rose 1.0% in April after rising by a revised 0.4% in March, which left total output 2.2% higher than a year ago...the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, was at 105.1 in April, after the February index was revised up from 103.5 to 103.7, which reduced the March gain to 0.4% from the previously reported 0.5%...

the manufacturing index, which accounts for more than 77% of the total IP index, rose 1.0% to 103.9 in April, after the March index was revised from 102.9 to 102.8, and the February index was revised from 103,3 to 103.2...as a result, the manufacturing index now stands 1.7% above its year ago level....meanwhile, the mining index, which includes oil and gas well drilling, rose 1.2%, from 106.9 in March to 108.2 in April, after the March index was revised up from from the originally reported 106.1, which left the mining index 7.3% higher than it was a year earlier...finally, the utility index, which typically fluctuates due to deviations from normal temperatures, rose by 0.7% in April, from 101.5 to 102.2, after the March utility index was revised from 101.3 to 101.5, up 8.2% from February...

this report also includes capacity utilization data, which is expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry rose to 76.7% in April from 76.1% in March, after capacity utilization for both January and February were identically revised from 75.7% to 75.8%...capacity utilization of NAICS durable goods production facilities rose from a revised 74.6% in March to 75.3% in April, while capacity utilization for non-durables producers rose from a revised 76.8% to 77.5%...capacity utilization for the mining sector rose to 83.3% in April from 82.5% in March, which was previously reported as 81.9%, while utilities were operating at 76.3% of capacity during April, up from their 75.8% of capacity during March, which was previously reported at 75.7%...for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories.. 

April Housing Starts and Building Permits Reported Lower

the March report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were started at a seasonally adjusted annual rate of 1,172,000 in April, which was 2.6 percent (±8.8 percent)* below the revised March estimate of 1,203,000 annually, but was still 0.7 percent (±7.0 percent)* above last April's rate of 1,164,000 housing starts a year...the asterisk indicates that the Census does not have sufficient data to determine whether housing starts actually rose or fell during April, or even from a year ago, with the figures in parenthesis the most likely range of the change indicated; in other words, April housing starts could have been up by 6.6% or down by as much as 11.4% from those of March, with revisions of a greater magnitude in either direction possible...in this report, the annual rate for March housing starts was revised from the 1,215,000 reported last month to 1,203,000, while February starts, which were first reported at a 1,288,000 annual rate, were revised from last month's initial revised figure of 1,303,000 annually back to a 1,288,000 annual rate with this report....these annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 106,600 housing units were started in April, up from the 97,600 housing units that were started in March and the 87,800 housing units that were started in February..

the monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data...in April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,229,000, which was 2.5 percent (±1.1 percent) below the revised March rate of 1,260,000 permits, but was still 5.7 percent (±1.4 percent) above the rate of building permit issuance in April a year earlier...the annual rate for housing permits issued in March was unrevised....again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 102,900 housing units were issued in April, down from the revised estimate of 112,500 new permits issued in March.... for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk:Housing Starts decreased to 1.172 Million Annual Rate in April and Comments on April Housing Starts... 

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

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