Compare The Ways In Which Way Will Us Industrial Production And Capacity Utilization Move

Which way will U.S. industrial production and capacity utilization move: Upward, downward, or sideward?

Industrial production and capacity utilization declined in October as reported by the Federal Reserve today [yesterday – if posted tomorrow, etc.]. Industrial production measures our economy’s output—in manufacturing, utilities, and mining sectors. Capacity utilization estimates how much capacity is being used from the economy’s available capacity to produce demanded finished goods. Both numbers give us a sense whether our economy is growing. A low percentage rate of capacity utilization indicates that a huge slack in the economy.

The level manufacturing activity affects the economy in many ways. About 12% of credit union memberships, based on occupation, is manufacturing. Almost 75% of total industrial output is accounted by manufacturing. According to the National Association of Manufacturers, U.S. manufacturing exports totaled $1.4 trillion last year, with value-added in manufacturing measuring $2.1 trillion. That’s roughly 9% and 13% of GDP, respectively.

For the second consecutive month industrial production and capacity utilization fell, consistent with the subdued economic expansion in the third quarter. Industrial production rose 0.8% in July and 0.1% in August, but declined 0.2% in September

Both industries could use a boost in consumption domestically and from overseas to keep prices at a sustainable level. The weaker economies overseas, particularly China, is causing demand for commodities to stay low. On a daily basis, the West Texas Intermediate oil price per barrel has remained in the $40s. Current low commodity prices—in copper, steel, oil and energy related commodities—are not sustainable and already feeding into the labor market. In September, manufacturing lost 9,000 jobs and no manufacturing jobs were added in