Importance
Industrial production and capacity utilization are significant indicators of trends in the manufacturing sector, as well as activity in mining and utilities.

Interpretation
The bond market will rally with slower production and a lower utilization rate. Bond prices will fall when production is robust and the utilization rate suggests supply bottlenecks. Healthy production growth is bullish for the stock market only if it isn't accompanied by indications of inflationary pressures.

The production of services may have gained prominence in the United States, but the production of manufactured goods remains a key to the economic business cycle. A nation's strength is judged by its ability to domestically-produce those goods demanded by its residents as well as by importers. Many services are necessities of daily life and would be purchased whether economic conditions were weak or strong. Production of manufactured goods creates volatility in the economy. If demand for manufactured goods decreased, it would lead to less production, declines in employment and income.

Three significant sectors include motor vehicles and parts, aircraft, and information technology. Volatility in any of these sectors would affect the total.

Industrial production is subject to some monthly variation. As with all economic statistics, the three-month moving average of the monthly changes or year over year percent changes provide a clearer picture of the trend in this series.

Frequency
Monthly.

Source
Board of Governors, Federal Reserve System.

Availability
Around mid-month.

Coverarge
Data are for the previous month. (Data for June are released in July.)

Revisions
Monthly, data for the prior three months are revised to reflect more complete information.

Annually, new seasonal adjustment factors are introduced in December. This revision affects at least three years worth of data. The magnitude of the revision is moderate.