Today's Report (12/16/2021)

Industrial production rose 0.5% in November. The indexes for both manufacturing and mining increased 0.7%, while the index for utilities decreased 0.8%. At 102.3% of its 2017 average, total industrial production in November was 5.3% above its year-earlier level and at its highest reading since September 2019. Capacity utilization for the industrial sector increased 0.3 percentage point to 76.8%; even so, it was 2.8 percentage points below its long-run (1972–2020) average. Capacity utilization for manufacturing increased 0.5 percentage point to 77.3% in November, its highest rate since December 2018.

US Industrial Production Sinks Record 11.2% in April | Manufacturing  Business Technology

What is it?

It covers manufacturing, mining, and electric and gas utilities.

What are the fundamental effects?

An upward movement in industrial output is a sign of a strengthening economy and the sectors that are placing orders for durable goods.

How does it affect the markets?

CURRENCY - The Dollar usually reacts modestly to industrial production, the report can be used to access future inflation and interest rates, a jump in industrial output suggests a faster economic growth.

STOCKS - This report generally does not move stocks that much, but strong production is positive for stocks as it suggests more economic growth and better corporate profits.

BONDS - A larger-than-expected jump could prompt a sell-off in the bond market.

US Capacity Utilization - What is it?

The percentage of production capacity being utilized in the US.

What is the fundamental effect?

It reflects overall growth and demand in the economy. It can also act as a leading indicator of consumer price inflation.

How does it affect the markets?

The reaction in the market is generally very similar to the Industrial Production report.