Release Explanation: The total value of the output from mines, industrial factories and utilities is in the Industrial read. The value of manufactured goods is in the Manufacturing read. The Shipment number covers the amount sent abroad. Capacity Utilization cover at what rate Factories are running at compared to the maximum. High production numbers usually denote an economy in an upwards trend, or growth period. These reports are reactive to change and are well respected. GDP will normally be directly affected by the Industrial Production component. Durable Goods and Retail Sales will normally be affected by the Manufacturing aspect of the report. A currency will eventually be affected by these numbers, but only once they filter through to the main releases.
Trade Desk Thoughts: Industrial Production fell for a fourth straight month in February, the Federal Reserve said today. Production decline by 1.4%, led by declining demand for autos and exports. Economists had expected to see production decline by 1.2%. January's number was revised to show a 1.9% decline, larger than the 1.8% reading originally reported.
Factory capacity declined to 70.9%, the lowest level on record. Economists had expected to see capacity at 71.1%. January was revised lower to 71.9% from 72.0%.
Producers are cutting back as demand continues to decline, said Matthew Carniol, chief currency strategist at TheLFB-forex.com. Expect to see a further reduction in output at least through the first half of the year as the recession worsens.
Factory output, which accounts for about 80% of industrial production, decreased 0.7%, led by declines in furniture, appliances, machinery and computers.
Motor vehicle and parts production improved 10% in February after plunging 25% in January. Automakers assembled cars and light trucks at an annual pace of 4.73 million last month, the second lowest amount after the 3.83 million assembled in January, and the weakest since records began in 1967.
Excluding automobiles, factory output dropped 1.2%.
Forex Technical Reaction: Stocks opened higher after S&P futures rose about 1% overnight. The dollar weakened as S&P futures gained.