Industrial Production

Who: Federal Reserve Board

When: Around the 15th of each month

What: Officially named the Federal Reserve Statistical Release G.17. It measures the change in the production of the nation's factories, mines and utilities as well as a measure of their industrial capacity and the extent available resources among factories, utilities and mines are being used. The level of industrial production divided by the level of industrial capacity gives the capacity utilization rate. The manufacturing sector accounts for one quarter of the economy and the capacity utilization rate shows how much factory capacity is in use.

Why: Industrial Production is one of the major reports measuring economic activity. Stronger economic growth typically leads to higher inflation, so fixed income markets usual react negatively to stronger than expected economic growth.

In particular, capacity utilization is watched for fluctuations in production and additional inflationary pressures. The Fed watches this report for insight on whether or not production constraints will be causing increases to inflation and how they should adjust interest rates to accommodate for fluctuations in production. Changes in capacity utilization can be watched for insight into possible changes to producer prices. The report is highly watched and the markets are sensitive to its data.