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Industrial Production Surges Due To Cold Weather Boost For Utility Demand

Tyler Durden's picture


Stocks are un-surging on the "good" news in the headline beats for Industrial Production (biggest jump and biggest beat in 13 months) and Capacity Utilization (best since June 08). However, as is always the case, the underlying data hides some less than positive signs. The bulk of the gains in production were from Utilities (+3.9%) as colder-than-expected temperatures boosted demand (the same temps that retailers are crying about). Manufacturing output remains 3.6% below its pre-recession peak (though gains were broad-based).

Note the last spike of this magnitude was around the time of Sandy - and was entirely unsustainable...



From the report:

Industrial production increased 1.1 percent in November after having edged up 0.1 percent in October; output was previously reported to have declined 0.1 percent in October. The gain in November was the largest since November 2012, when production rose 1.3 percent. Manufacturing output increased 0.6 percent in November for its fourth consecutive monthly gain. Production at mines advanced 1.7 percent to more than reverse a decline of 1.5 percent in October. The index for utilities was up 3.9 percent in November, as colder-than-average temperatures boosted demand for heating. At 101.3 percent of its 2007 average, total industrial production was 3.2 percent above its year-earlier level. In November, industrial production surpassed for the first time its pre-recession peak of December 2007 and was 21 percent above its trough of June 2009.

Capacity utilization for the industrial sector increased 0.8 percentage point in November to 79.0 percent, a rate 1.2 percentage points below its long-run (1972-2012) average.

The production of consumer goods increased 1.5 percent in November and stood 2.7 percent above its level of a year earlier. The output of durable consumer goods rose 2.2 percent, and all of its major components registered gains of 1.0 percent or more. The largest increases were in the production of automotive products, which rose 3.3 percent, and in the production of home electronics, which moved up 2.6 percent. The production of consumer nondurables rose 1.3 percent. The rise was supported by strong gains in chemical products and especially in consumer energy products. After three consecutive months of gains, the output of business equipment fell 0.5 percent in November. The indexes for information processing equipment and for industrial and other equipment declined 1.8 percent and 0.6 percent, respectively, while the production of transit equipment increased 1.0 percent. Despite its decrease in November, the index for business equipment was 2.2 percent above its year-earlier level.

The output of defense and space equipment declined 0.8 percent in November following three months of gains. The index for November was 1.4 percent above its year-earlier level.

Among nonindustrial supplies, construction supplies moved up 0.6 percent in November to record its sixth consecutive monthly increase; the index was 4.9 percent above its level of a year earlier. The output of business supplies advanced 1.0 percent in November, its fifth consecutive increase, and has gained 3.1 percent during the past 12 months.

* * *

Manufacturing output rose 0.6 percent in November to a level that was 2.9 percent above a year earlier but 3.6 percent below its pre-recession peak; gains were widespread across industries. The factory operating rate rose 0.4 percentage point to 76.8 percent, a rate 1.9 percentage points below its long-run average.


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Mon, 12/16/2013 - 10:36 | Link to Comment TeamDepends
TeamDepends's picture

"Global cooling is the boogie man and always has been the boogie man."

-Algore (as he flushes global warming down the memory hole)

Mon, 12/16/2013 - 11:49 | Link to Comment SAT 800
SAT 800's picture

"Will someone please turn up the Global Warming".

Mon, 12/16/2013 - 14:59 | Link to Comment rotagen
rotagen's picture

Well the next big thing will be water utilities, Driest year in California since records were first kept.


Learn some science global warming skeptics,


the Jet stream has been slowed and moved north, causing bigger swings and longer lasting swings (resulting in more extremes both warm and COLD in the temperate latitudes). and learn how to read a chart.  Yes, there are peaks and troughs in arctic ice around the average, which is heading south.  Or I guess I shouldn't have used a complicated term like "average"

Mon, 12/16/2013 - 10:36 | Link to Comment whatsinaname
whatsinaname's picture

The Fed needs to hike QE now to combat this cold weather. 

Mon, 12/16/2013 - 10:37 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

dow 16,000 here we come.............................................again

Mon, 12/16/2013 - 11:54 | Link to Comment SAT 800
SAT 800's picture

On a more sobering note; the S&P500 Chart shows a nice double top at 1810 for the Dec. Contract month; about ten days apart; a well established up channel starting in the first week of Oct. and which is now broken by a newly established down channel. Today is a rally in a down channel; at least according to one classic form of chart reading. It won't be a bull market until it takes out 1810; higher highs and higher lows, is a definition of a bull market.

Mon, 12/16/2013 - 10:36 | Link to Comment yrbmegr
yrbmegr's picture

Taper now, please.

Mon, 12/16/2013 - 10:38 | Link to Comment Ness.
Ness.'s picture

Wow.  The algos/PPT are out of control today.  170pts on the DOW, really guys?  Show some restraint.  You're making it too obvious.  

Mon, 12/16/2013 - 10:42 | Link to Comment thismarketisrigged
thismarketisrigged's picture

wow, s&p should recapture 1800 in no time,


what a fucking farce, up 1 percent on nothing, after futures were down modestly lastnight.

Mon, 12/16/2013 - 10:42 | Link to Comment esum
esum's picture

does USSA economic growth seem even a remote possibility with the economic devastation obamacare will inflict....states raising taxes to offset additional medicare burden... and if the consumer is sidelined next year who will china foist its useless shit on...  and then taper too... add in a few municipal bankruptcys.. Yeah a bright outlook for sure

Mon, 12/16/2013 - 10:53 | Link to Comment Dan The Man
Dan The Man's picture



Mon, 12/16/2013 - 10:51 | Link to Comment SheepDog-One
SheepDog-One's picture

People turned on their furnaces over the weekend and VOILA! Recovery!

Mon, 12/16/2013 - 10:54 | Link to Comment Dan The Man
Dan The Man's picture

Has anyone done an economic impact study of martial law?

Mon, 12/16/2013 - 10:59 | Link to Comment firstdivision
firstdivision's picture

Why is electricity demand part of the industrial production number?  While yes, its thought of as >usage = >economic growth ( in the old normal, but not now), its still an expense to most businesses. 

Mon, 12/16/2013 - 13:14 | Link to Comment SDShack
SDShack's picture

It's even better than that. Not only is demand/usage a metric of economic growth, but also $ spent. That means energy inflation (not counted in GDP) can be captured in increasing $ spent on utilities... and violla... it's not just recovery... it's GROWTH!

Mon, 12/16/2013 - 11:11 | Link to Comment steveo77
steveo77's picture

NRC Soups up Another Old Boiling Water Clunker, Stop the Madness
Just 6 months after a major error during maintenance that caused a massive water drop in the reactor, and thus an emergency shutdown. XCEL energy instead convinces the NRC that what they need instead of a trip to the woodshed, is to soup up this old 1970 clunker. NRC agreed to let them burn hotter and heavier to increase their profits.
Xcel promised costs of around $100M for the uprate Soup Up….and instead it was $267M over budget. Which the rate payers will have to suck up all the costs for.

Monticello is a Boiling Water Design, the worst design, the one that is destroying the Islands of Japan via Fukushima.

Mon, 12/16/2013 - 12:01 | Link to Comment SAT 800
SAT 800's picture

You're right. It's a dreadful machine; apparently resulting from some sort of bribery or fraud between the NRC and GE in the first place; a sanely managed country would have scrapped it ten years ago, and built one of several sane designs to replace it.

Mon, 12/16/2013 - 13:24 | Link to Comment evernewecon
evernewecon's picture





Aint that dandy.

Production stats are dependent on

burning coal, with this probably 

at play in the cold snap (though

a lot of people say something that

looked like snow but wasn't snow 

fell on their cars) 

and the dollar's dependent on 

producing oil or sourcing it for



Stuff like this


would keep lots of people productive for 

a long time, and so long as we're ditching

destroying the oceans and Gulf of Mexico,

destabilizing the Arctic, and fighting 

wars for oil, the Mom and Pop oil/gas

royalty holder in South Texas actually 

not only need not fear energy 

rationalization but would almost certainly

benefit immensely from it, at least for 

another 1, 1 1/2 generations.






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