Production Continues to Recover

Posted on Friday, January 15, 2010

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Marketwatch details:

Colder-than-usual weather contributed to the gain in December, with utility production rising a seasonally adjusted 5.9%. The output of factories dropped 0.1% in November after a 0.9% gain in November, repeating the see-saw pattern of the past four months. Output of mines rose 0.2%. Read our complete economic calendar and consensus forecast.
For all of 2009, output plunged 9.7%, the steepest yearly decline since output fell 13.7% in 1946. Output fell at a 12.5% annual pace in the first half of the year, then rose at a 9.6% annual pace in the final six months of the year. Since the recession began two years ago, industrial output dropped 10.8%. Manufacturing output fell 13.2% since the recession began.
In December, capacity utilization in industry rose to 72% from 71.5%. It's the highest in a year. For manufacturing, capacity utilization rose to 68.6% from 68.5%, also the highest since December 2008. The utilization rate in the factory sector -- a measure of slack in the economy -- is 11 percentage points below the long-term average, showing very weak inflationary pressures.

And the relationship between capacity and inflation remains strong.