May 18, 2017 – The Industrial Production Index (IPI) measures the manufacturing, electric, mining, and gas industries output on a monthly basis.
Industrial output is up 1.0%, above the consensus of 0.4% and well above March’s revised 0.4% increase. Manufacturing rose 1.0%, above expectations of 0.3% while the capacity utilization rate came in at 76.7%, above estimates. Utility output rose 0.7% for the month and mining is up 1.2%, while auto production surged 5.0%.
The surge in auto production of 5.0% played a key role in the largest industrial production increase in three years. This large of an increase could be a result of auto manufacturers increasing their production of cars to sell when summer hits. The increase in manufacturing, utility output, and mining also played a huge role in the total increase of industrial production. This means that the U.S. is producing more goods and output contributing to overall GDP. The last time the index was at 105.1 was March 2015, taking a decline through 2016 and eventually rising back up to 105.1 for April 2017. This surge in auto production could possibly be an outlier that is skewing the graph to show higher than normal numbers.