December 17,, 2024
Industrial production declined 0.1% in November after falling 0.4% in October and 0.5% in September. The Fed reported that The Boeing strike reduced production by 0.3% in September and 0.2% in October. Despite the end of the Boeing strike in November, the aerospace production category declined 2.6% because of a drop in the production of aircraft parts.
Breaking industrial production down into its three basic categories — manufacturing, mining, and utilities. Manufacturing production rose 0.2% in November after falling 0.7% in October after having declined 0.5% in September. In the past year manufacturing output has declined 1.0%.
In the motor vehicle sector production climbed 3.5% in November after having plunged by 5.4% in October after having declined 0.3% in September. In the past year motor vehicle production has fallen 3.5%. However, this component is extremely volatile from month to month.
Excluding the motor vehicle sector, manufacturing output declined 0.1% in November after falling 0.3% in October and 0.5% in September.. In the past year it has declined 0.7%.
High tech production rose 0.3% in November after climbing 0.8% in October and 0.1% in September High tech production has risen 7.4% in the past year. We would suggest that if firms are unable to find an adequate supply of workers, they will turn to technology in an effort to boost production and satisfy the demand for their products. At the same time firms are all experimenting with AI in an effort to figure out how it might help them boost productivity. Thus, we expect high tech production to continue to climb rapidly in the months ahead.
Mining (14%) output fell 0.9% in November after declining 0.1% in October and 0.7% in September. Mining has fallen 1.3% in the past year.
Utilities output declined 1.3% in November after rising 1.3% in October and having declined 0.6% in September. Over the past year utility output has risen 0.1%. This component is extremely volatile from month-to-month as the weather fluctuates.
Capacity utilization in the manufacturing sector was unchanged in November at 76.0% after having declined 0.6% in October and 0.5% in September. However, the utilization rate has been pulled down by the Boeing strike and the effects of Hurricanes Helene and Beryl. It is currently below the 77.4% level that is generally regarded as effective full capacity utilization, but it should rebound in the next couple of months..
GDP grew 2.8% in the third quarter as firms keep hiring at a relatively rapid pace. We expect GDP to be 2.5% in the fourth quarter and 2.9% in 2025.
Stephen Slifer
NumberNomics
Charleston, SC
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