Economic Watch: Industrial Production Weakens, Homebuilder Optimism Up
For the first quarter of 2015 this measure of the total activity at the nation’s factories, mines and utilities declined at an annual rate of 1%, the first quarterly decrease since the second quarter of 2009.


Industrial production in the U.S. decreased 0.6% in March after increasing an unrevised 0.1% in February, according to a new Federal Reserve report.
For the first quarter of 2015 this measure of the total activity at the nation’s factories, mines and utilities declined at an annual rate of 1%, the first quarterly decrease since the second quarter of 2009.
The decline last quarter resulted from a drop in oil and gas well drilling and servicing, as well as from a decrease in manufacturing production of 1.2%.
In March, manufacturing output moved up 0.1% for its first monthly gain since November. However, factory output in January is now estimated to have fallen 0.6%, about twice the size of the previously reported decline.
American Trucking Associations Chief Economist Bob Costello described the slight upturn in March from the month before as “not what we were hoping for” in his Twitter feed, and noted that it will be interesting to see what this means for monthly truck tonnage figures when they are soon released.
At 105.2% of its 2007 average, total industrial production in March was 2% above its level of a year earlier. Capacity utilization for the industrial sector decreased 0.6 of a percentage point in March to 78.4%, a rate that is 1.7 percentage points below its 1972–2014 average.
Homebuilders Feeling More Optimistic
Meantime, a separate economic report shows builder confidence in the market for newly built, single-family homes in April rose four points to a level of 56, hitting a three-month high, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
“The HMI component index measuring future sales expectations rose five points in April to its highest level of the year,” said NAHB Chief Economist David Crowe. “This uptick shows builders are feeling optimistic that the housing market will continue to strengthen throughout 2015.”
A number over 50 indicates that more builders view conditions as good than poor.
All three HMI components registered gains in April. The component charting sales expectations in the next six months jumped five points to 64, the index measuring buyer traffic increased four points to 41, and the component gauging current sales conditions rose three points to 61.
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