Two figures in the Federal Reserve's February 15, 2017 industrial report shared the number 0.3 but measured different things. January industrial production fell 0.3 percent from December after seasonal adjustment. Industrial capacity utilization fell 0.3 percentage point to 75.3 percent. The first describes an output change; the second describes a change in the share of capacity being used. [g17_20170215]
The release placed utilization 4.6 percentage points below its 1972–2016 average. Separately, it put the industrial-production index at 104.6 percent of its 2012 average, about unchanged from a year earlier. Neither the index level nor the utilization rate is a measure of GDP growth. Their numerical scales answer different questions about industrial activity. [g17_20170215]
The aggregate output decline also concealed opposing component movements. Manufacturing increased 0.2 percent and mining increased 2.8 percent, while electricity and gas utilities declined 5.7 percent. The Board said unusually warm weather reduced heating demand and largely explained the utilities fall. That attributed explanation does not imply that every industrial category weakened during the month. [g17_20170215]
December's comparator requires its own date label. The January 18 release reported a 0.8 percent monthly increase in total output; the February release revised that gain to 0.6 percent. The earlier release is useful evidence of the revision, not an unchanged baseline to splice into the later series. Both reports come from one Federal Reserve statistical program, rather than independent measurements corroborating one another. [g17_20170215][g17_20170118]
Source documents
- Industrial Production and Capacity Utilization - G.17, February 15, 2017https://www.federalreserve.gov/releases/g17/20170215/default.htm
- Industrial Production and Capacity Utilization - G.17, January 18, 2017https://www.federalreserve.gov/releases/g17/20170118/default.htm