An industrial utilization rate describes equipment and productive capacity, not the worth or effort of the people working around it. In the Federal Reserve's February 15, 2017 release, January capacity utilization stood at 75.3 percent, down 0.3 percentage point and 4.6 points below the 1972–2016 average. Our ethical reading is to resist turning that aggregate into a judgment about individual workers. [g17_20170215]
The output figures make that restraint concrete. Total industrial production fell 0.3 percent during January after seasonal adjustment, but manufacturing rose 0.2 percent and mining rose 2.8 percent. Electricity and gas utilities declined 5.7 percent. The Board largely attributed the utilities movement to warm weather reducing heating demand, rather than describing a failure shared by all industries. [g17_20170215]
The preceding release also linked utilities to temperature. On January 18, the Board reported a 6.6 percent December utilities increase, largely because temperatures returned toward normal after a warm November. That release initially estimated total December output growth at 0.8 percent; the February report revised it to 0.6 percent. These are dated estimates from the same statistical chain. [g17_20170215][g17_20170118]
Careful stewardship of information means keeping those mechanisms visible. A weather-sensitive output change does not by itself tell us whether a household lost income, and a utilization gap does not identify who should bear an economic adjustment. Neither release supplies those answers. Their narrower contribution is a picture of industrial activity whose components, units and vintages must remain distinct. [g17_20170215][g17_20170118]
Source documents
- Industrial Production and Capacity Utilization - G.17, February 15, 2017https://www.federalreserve.gov/releases/g17/20170215/default.htm
- Industrial Production and Capacity Utilization - G.17, January 18, 2017https://www.federalreserve.gov/releases/g17/20170118/default.htm