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Industrial Production and Capacity Utilization for January 1999.


Released for publication February February: see month. , 17

Industrial production was unchanged in January January: see month. . Manufacturing output increased 0.1 percent, and utility output increased 0.2 percent, but production at mines decreased 1.8 percent. At 136.7 percent of its 1992 average, manufacturing production in January was 2.2 percent higher than it had been in January 1998. Overall capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens.  in January slipped 0.3 percentage point, to 80.5 percent, 1 1/2 percentage points below its 1967-98 average.

MARKET GROUPS

The output of durable consumer goods consumer goods

Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and
, which increased 0.3 percent, was lifted by an increase in automotive products. In contrast, the production of nondurable non·du·ra·ble  
adj.
Not enduring; being in a state of constant consumption: nondurable items such as paper products.

n.
A consumable item: nondurables such as food. 
 consumer goods excluding energy fell 0.3 percent and was down 2 1/4 percent from its level a year ago, a drop reflecting, in part, softness for clothing and paper products. The output of consumer energy products, which has been volatile recently, rose noticeably no·tice·a·ble  
adj.
1. Evident; observable: noticeable changes in temperature; a noticeable lack of friendliness.

2. Worthy of notice; significant.
 again in January.

The production of business equipment edged down 0.1 percent. Declines in the output of industrial equipment and transit equipment more than offset a gain in information processing information processing: see data processing.
information processing

Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations.
 equipment. Some of the decrease in transit equipment reflects further reductions in commercial aircraft production, which peaked last fall alter having climbed rapidly during the past few years. The output of construction supplies was flat, but at a high level, following strong gains in the fourth quarter. The production of business supplies increased 0.2 percent.

The production of materials inched up 0.1 percent after having risen modestly in the preceding three months. The production of durable goods durable goods

Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables.
 materials increased 0.5 percent mainly because of strength in the production of semiconductors and computer parts. However, the output of basic metals fell 0.6 percent, continuing the weakness that had begun in early 1998. In addition, the output of consumer durable parts, which rose rapidly late last year, has somewhat eased recently. The production of nondurable materials also edged down 0.2 percent, a move mainly reflecting ongoing weakness in textiles textiles, all fabrics made by weaving, felting, knitting, braiding, or netting, from the various textile fibers (see fiber). Types of Textiles
 and chemicals.

INDUSTRY GROUPS

Manufacturing output edged up 0.1 percent, with a small gain in the production of durable goods and a slight pullback Pullback

A falling back of a price from its peak. This type of price movement might be seen as a brief reversal of the prevailing upward trend, signaling a slight pause in upward momentum.
 in the production of nondurable goods. Within durable goods industries, changes in production were mixed. Industries with large increases in production included lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to , furniture, and electrical machinery; industries showing cut-backs included primary metals, transportation equipment (notably civilian aircraft), and miscellaneous manufactures. The production of nondurable goods edged down 0.1 percent in January after having been flat in December December: see month. . Losses in tobacco, apparel, and leather products more than offset gains in petroleum and food products. Mining production fell again, pulled down by a sharp drop-off in coal production and the continued contraction contraction, in physics
contraction, in physics: see expansion.
contraction, in grammar
contraction, in writing: see abbreviation.

contraction - reduction
 in oil and gas extraction extraction /ex·trac·tion/ (eks-trak´shun)
1. the process or act of pulling or drawing out.

2. the preparation of an extract.
.

The factory operating rate Operating rate

The percentage of total production capacity of a company, industry, or country that is being used.


operating rate

The portion of capacity at which a business operates.
 dropped 0.3 percentage point, to 79.6 percent--more than 2V2 percentage points below the level of January 1998. The utilization utilization,
n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be
 rates for advanced-processing and primary-processing industries slipped 0.3 percentage point. The utilization rate for mines fell 1.5 percentage points, to a level about 6 percentage points below its long-term Long-term

Three or more years. In the context of accounting, more than 1 year.


long-term

1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term.
 average. Temperatures remained relatively warm, and the operating rate for utilities, at about 90 percent, was little changed.

NOTICE

The data in this release include preliminary estimates of capacity growth for 1999. The capacity estimates in next month's release will incorporate a small change in the method used to interpolate See interpolation.  the annual estimates of capacity growth to the monthly frequency. The current monthly capacity figures are computed under the assumption that capacity growth is constant from the beginning to the end of a year but that growth rates Growth Rates

The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures.

Notes:
Remember, historically high growth rates don't always mean a high rate of growth looking into the future.
 may change abruptly a·brupt  
adj.
1. Unexpectedly sudden: an abrupt change in the weather.

2. Surprisingly curt; brusque: an abrupt answer made in anger.

3.
 between the last months of one year and the first months of the next. The new procedure, which allows capacity growth rates to change smoothly over time, will be incorporated in the data beginning with October October: see month.  1998.
Industrial production and capacity utilization, January 1999

                                     Industrial production,
                                      index, 1992 = 100

           Category                          1998

                                  Oct.(r)    Nov.(r)    Dec.(r)

Total                             132.4      132.3      132.5
Previous estimate                 132.0      132.5      132.8
Major market groups
Products, total(2)                124.9      124.5      124.7
  Consumer goods                  115.2      115.1      115.4
  Business equipment              169.0      168.0      168.0
  Construction supplies           128.4      129.1      130.3
Materials                         144.5      144.8      145.2
Major industry groups
Manufacturing                     136.1      136.4      136.6
  Durable                         161.2      161.0      161.4
  Nondurable                      110.9      111.6      111.6
Mining                            102.0      101.4      100.3
Utilities                         116.5      111.4      114.1

                                 Capacity utilization, percent

                                 Average,     Low,      High,
                                 1967-98      1982     1998-89

Total                             82.1        71.1      85.4
Previous estimate                 ...          ...       ...
Manufacturing                     81.1        69.0      85.7
  Advanced processing             80.5        70.4      84.2
  Primary processing              82.4        66.2      88.9
Mining                            87.5        80.3      88.0
Utilities                         87.4        75.9      92.6

                                    Industrial production,
                                     index, 1992 = 100

                                      Percentage change

           Category           1999
                                                1998(1)
                            Jan. (p)    Oct. r    Nov. r    Dec. r

Total                         132.5       .4        -.1       .2
Previous estimate               ...       .5        -.1       .2
Major market groups
Products, total(2)            124.6       .6        -.3       .2
  Consumer goods              115.4       .4        -.1       .3
  Business equipment          167.7      1.0        -.6       .0
  Construction supplies       130.3      1.2         .5      1.0
Materials                     145.3       .1         .2       .3
Major industry groups
Manufacturing                 136.7       .7         .2       .1
  Durable                     161.6      1.0        -.1      -.1
  Nondurable                  111.6       .3         .7       .7
Mining                        98.5       -.4        -.5      -.5
Utilities                     114.3     -3.1       -4.4     -4.4

                                   Capacity utilization, percent

                             1998             1998

                             Jan.     Oct.(r)   Nov.(r)   Dec.(r)
Total                        83.0      81.3      80.9      80.8
Previous estimate              ...     81.4      81.0      80.9
Manufacturing                82.2      80.3      80.1      79.9
  Advanced processing        81.0      79.6      79.5      79.1
  Primary processing         85.2      82.4      82.3      82.4
Mining                       90.0      84.7      84.2      83.1
Utilities                    87.2      92.0      87.9      90.0

                                    Industrial production,
                                     index, 1992 = 100

                                      Percentage change
           Category
                                    1991(1)     Jan. 1998
                                                   to
                                   Jan. (p)     Jan. 1999

Total                                 .0           1.7
Previous estimate                    ...           ...
Major market groups
Products, total(2)                    -.1          1.6
  Consumer goods                       .0          -.5
  Business equipment                  -.1          7.3
  Construction supplies                .0          3.8
Materials                              .1          1.9
Major industry groups
Manufacturing                          .1          2.2
  Durable                              .1          5.1
  Nondurable                          -.1         -1.3
Mining                               -1.8         -8.5
Utilities                              .2          4.2

                                 Capacity          MEMO
                                 utilization,     Capacity,
                                  percent        percentage
                                                   change,
                                                 Jan. 1998
                                     1999           to
                                   Jan. (p)      Jan. 1999

Total                                80.5          4.9
Previous estimate                    ...            ...
Manufacturing                        79.6          5.5
  Advanced processing                78.8          6.5
  Primary processing                 82.1          2.8
Mining                               81.6           .9
Utilities                            90.1           .9


NOTE. Data seasonally adjusted Seasonally adjusted

Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year.
  adjusted monthly data.

(1.) Change from preceding month.

(2.) Contains components in addition to those shown.

(r) Revised.

(p) Preliminary.
COPYRIGHT 1999 Board of Governors of the Federal Reserve System
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Federal Reserve Bulletin
Geographic Code:1USA
Date:Mar 1, 1999
Words:1140
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