Industrial Production Preview

The Federal Reserve will be releasing the monthly index of Industrial Production at 9:15 ET, with consensus expectations for a increase of 0.2 percent, following last month's 0.2 percent decrease. The consensus range is from 0.1 percent to 0.4 percent. The manufacturing component is expected to show a scant increase of just 0.1 percent. Manufacturing has declined in three of the last five releases. Industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining, and electric and gas utilities. Industrial production has been consistently weak all year, with the yearly index of Industrial production on pace for a tepid 1 percent gain. The industrial sector accounts for less than 20 percent of GDP. but much of the cyclical variability in the economy. Industrial production and capacity utilization indicate trends in manufacturing strength and whether resource utilization is strained, which many times leads to inflationary pressures. Industrial production also measures current output for the economy and helps to define turning points in the business cycle, with peaks and troughs signalling recession and recovery. S&P futures are trading marginally higher in front of the release.