- Prior was 0.0% (revised to +0.1%)
- Capacity utilization 76.9% vs 76.5% exp
- Manufacturing output +0.3% vs +0.3% exp
- Prior manufacturing output -0.3% (revised to -0.2%)
- Mining +0.2%
- Utilities +3.5%
- Machinery +1.4%, primary metals +1.6%, electrical equipment +1.3%, chemicals +1.0%.
The headline is flattered by utilities. Electric utility output jumped 3.7% m/m and is up 9.6% y/y, and the utility operating rate rose 2.3 points to 73.8%. That could be weather, but the year-over-year trend is consistent with data center load. Utilities output rose at a 14.8% annualized pace in Q3.
Manufacturing is a two-speed story:
- Semiconductor output rose 2.1% m/m and is up 19.9% y/y. It grew at a 28.4% annualized rate in Q3, which drove most of the 3.8% gain in durables.
- Excluding high-tech, factory output rose just 0.2% m/m and is up only 0.7% y/y.
- Motor vehicles and parts fell 3.0%, with vehicles down 5.4%. Assemblies fell to a 10.21m annual rate from 10.61m in August and 11.0m in May. Excluding autos, manufacturing rose 0.5%.
AI is truly eating the world and it’s masking the undercurrents in the rest of the economy. Unfortunately, monetary policy is a blunt instrument and hiking rates to cool off inflation is going to hit the rest of the economy hard, including the struggling motor vehicle and overall manufacturing economy ex-tech. The better way to handle this would be on the fiscal side with some austerity but that’s not coming.
This article was written by Adam Button at investinglive.com.