February Industrial Production

In February, per the Federal Reserve, America’s Industrial Production (IP) fell 0.1%.  This matched the original January report which has now been revised to show a 0.3% increase instead.  The current decline was again led by the weather as unseasonably warm temperatures resulted in a 4.2% drop in output from utilities.  While mining output rose 0.8%, it wasn’t enough to compensate for that drop.

Manufacturing, the third component of this IP report tried to come to the rescue but managed just a 0.4% gain, well short of the 0.9% (revised from 0.3% in the original report) rise it delivered in January.  Output totals for both motor vehicles and parts counted for most of the gain in this segment.

Capacity utilization, one way to measure just how hard our manufacturing base is working, makes up another part of this same report.  For February it fell just 0.1%, now running at the 76.3% level.

All in all this release shows our country’s economy continues its healthy upward trajectory with little danger of inflationary pressure induced by constraints in capital resources or labor showing up to ruin the party anytime soon.  That it still remains well below the more typical low 80s level after emerging from an official recession more than two years ago shows we still have a ways to go.  I would have said it shows we have more work to do, but that is precisely the problem.  We first must find more work to do.