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T-Minus 15 Minutes: Industrial Production Expected To Show Some Life In May

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US industrial production, which will be released at 9:15 am ET, is expected to increase 0.2 percent for May, with analyst estimates ranging from 0.1 to 0.5 percent, according to Bloomberg.

The consensus estimate of a 0.2 percent increase is an improvement from a 0.3 percent decline in April. The related capacity utilization rate, a key metric that measures the overall slack in the economy, is expected to show a slight increase to 78.4 percent versus last month's reading of 78.2 percent.

The closely followed manufacturing component should come in at 0.3 percent according to consensus estimates, versus last month's flat reading.

Industrial production is a measure of output of the industrial sector, which is composed of manufacturing, mining, and utilities. While utility output has been somewhat stable recently, mining, owing to low steel and aluminum pricing, has been down for five months in a row. Manufacturing has been negative three of the last five months, with April coming in unchanged.

According to the Federal Reserve, at 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year prior levels. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run average. The Federal Reserve watches this figure closely for signs of inflation at the industrial level.

It will also be one of the last economic numbers before the Federal Reserve begins its two-day policy meeting on Tuesday.

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