Motor Vehicle Production Index Hits New Record High

The Econoday consensus estimate for Industrial Production was right on the mark at plus 0.3%, but the internals sure were surprising.

Industrial production increased 0.3 percent in December after rising 0.4 percent in November. For the fourth quarter as a whole, total industrial production moved up at an annual rate of 3.8 percent. In December, manufacturing output increased 1.1 percent, its largest gain since February 2018.

Manufacturing output advanced 1.1 percent in December and increased at an annual rate of 2.3 percent in the fourth quarter; the index rose 2.5 percent between the fourth quarter of 2017 and the fourth quarter of 2018. Within durable manufacturing, motor vehicles and parts posted a gain of 4.7 percent in December, and nonmetallic mineral products recorded an increase of nearly 3 percent; the indexes for several other durable goods industries advanced more than 1 percent. Among nondurables, the index for petroleum and coal products jumped 31/2 percent. Most other major categories of nondurables posted gains of less than 1 percent. The output of other manufacturing (publishing and logging) increased 0.2 percent.

Mining output rose 1.5 percent in December, with gains in oil and gas extraction, coal mining, and support activities for mining (mainly oil and gas well drilling); the index for mining was 13.4 percent above its level from a year earlier. The output of utilities fell 6.3 percent in December, with both electric and gas utilities posting sharp declines.

Industrial Production and Capacity Utilization

Manufacturing production is still below the pre-recession total.

Spotlight on Motor Vehicles and Parts

The 4.7% jump increase in motor vehicles and parts sure does not match auto sales reports from the manufacturers.

Was there a sudden jump in auto sales in December? We cannot tie industrial production numbers back to retail sales because that report is delayed.

Note that US Auto Overcapacity is 10 Plants 20,000 Direct Jobs.

Ford reported that its sales for December were down 9%. Ford's fleet sales and car sales both cratered, falling well into the double digits, or -19.5% and -27.8%, respectively. Ford followed GM by halting monthly sales reports.

Industrial production revisions seem likely.