Industrial production in December 2015 decreased by 0.6 percentage points (ppts), and by 3.4 ppts for Q4 as a whole. Manufacturing output edged down 0.1 ppts, while the utilities index fell 2.0 ppts as continued warm temperatures diminished demand for heating. Mining dipped 0.8 ppts, marking the fourth monthly decline. Total industrial production was 1.8 ppts below last year’s December average and industrial capacity utilization slid 0.4 ppts to 76.5%, which is 3.6 ppts below its 1972 to 2014 average.
The Purchasing Managers' Index (PMI) declined 0.4 ppts in December to 48.2%, with a value above 50 signifying expansion in the manufacturing industry. While December’s PMI reflects growth in six industries, such as miscellaneous manufacturing, the 10 industries reporting a decrease include primary metals, transportation equipment, fabricated metal products and machinery. Respondents are attributing soft demand to depressed energy markets and sluggish foreign economies.
The Consumer Confidence Index advanced to 96.5 in December 2015, from 92.6 in November. Consumers expect little change in business conditions and the labor market. Still, despite mixed expectations for their financial outlook, they remain optimistic.
New orders for manufactured durable goods in November 2015 remained virtually unchanged, with a less than $0.1 billion decrease to $238.6 billion. This follows a 2.8% increase in October. November’s shipments of manufactured durable goods advanced 0.8% or $2.0 billion to $241.7 billion, following October’s 1.2% decline. Transportation equipment drove the increase, climbing 2.6% or $2.0 billion to reach $80.6 billion.
Per the third estimate, real Gross Domestic Product (GDP) increased at an annual rate of 2.0% in Q3 2015, versus 3.9% growth in Q2 2015. The revised gains come from a smaller decrease in private inventory investment than originally estimated. Q3 GDP growth is attributed to positive personal consumption expenditures, residential and nonresidential fixed investment, and state and local government spending.
In December 2015, the chemical and allied products PPI increased to 263.1 from November’s reading of 262.8.