Industrial Production MoM
What is Industrial Production MoM?
The Industrial Production (IP) index, released monthly by the Federal Reserve, measures the real output of the manufacturing, mining, and electric and gas utility industries. The Capacity Utilization rate — released simultaneously — shows what percentage of productive capacity is being used across US industries. Manufacturing accounts for roughly 75% of the total IP index.
Why does it matter for investors?
Industrial Production is a coincident economic indicator — it moves in line with the broader business cycle rather than leading or lagging it. Sustained IP declines have historically preceded recessions. Capacity Utilization above 80% is associated with inflationary pressures, as factories operating near full capacity face supply constraints. A sharp drop in IP signals weakening corporate revenues in goods-producing sectors.
What to watch for
- ›Month-over-month IP change vs. consensus estimate
- ›Manufacturing sub-index (excludes mining and utilities for cleaner signal)
- ›Capacity Utilization rate vs. 80% inflation threshold
- ›Motor vehicle output — often drives large swings in headline IP
- ›Year-over-year trend: consecutive YoY declines signal industrial recession
When is Industrial Production released?
Industrial Production and Capacity Utilization are released monthly by the Federal Reserve at 9:15 AM ET, typically around the 15th–17th of the month for the prior month's data.
What does capacity utilization above 80% mean?
Capacity utilization above 80% historically signals that factories are running near full capacity, which can create supply-side inflationary pressure. The Fed watches this metric as one input into inflation risk assessment.
Market Reaction
QQQ & SPY price change ±5 trading days around this event
Source: Yahoo Finance