U.S. Industrial Production Starts 2016 On The Right Foot [Charts]

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Includes: AIRR, FIDU, FXR, IYJ, RGI, SIJ, UXI, VIS, XLI
by: ValueWalk

By Eric Bush, CFA - Gavekal Capital Blog

Industrial production in January increased by a very unexpected 0.9% in January. This was well above expectations as analysts were expecting a 0.4% MoM increase according to Bloomberg. Industrial production was helped by a 2.8% increase in vehicle production. So while the overall year-over-year change in industrial production is still negative at -0.7%, the manufacturing portion of industrial production is increasing again and is 1.23% higher than a year ago.

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Perhaps even more important than the fact that manufacturing is growing, capacity utilization surprised to the upside in January as well. Capacity utilization jumped from 76.5% to 77.1%. It was the largest 1-month increase since December 2010. Economic utilization (capacity utilization minus unemployment rate) increased 0.8% which is the largest jump since December 2010 as well.

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