Economic Event · monthly

Industrial Production & Capacity Utilization

Source: Federal ReserveRelease: ~15th-17th of monthTime: 9:15 AM ET

The Federal Reserve releases the Industrial Production and Capacity Utilization report monthly, around the 15th-17th, at 9:15 AM ET. The report covers output for the manufacturing, mining, and electric and gas utility sectors. Industrial production (IP) is one of the four components the NBER uses to date recessions. When IP turns negative on a year-over-year basis, it almost always overlaps with or precedes a recession call. Capacity utilization, which measures how much of the industrial base is being used, is a leading indicator of inflation pressures: utilization above 80% historically correlates with price pressures, while falling utilization signals disinflationary slack.

Why It Matters

Industrial production peaked in September 2022 and declined through mid-2023, confirming the manufacturing recession that the ISM had been signaling. The divergence between weak manufacturing IP and strong services output defined the "rolling recession" narrative that characterized the 2022-2023 slowdown.

What to Watch For

•Headline IP index month-over-month
•Manufacturing IP (largest component)
•Capacity utilization rate (inflationary above 80%)
•Mining sector output (energy proxy)
•Year-over-year IP trend (recession indicator)

Market Reaction Pattern

Weak IP: rates down, industrials sell off, defensive bid. Capacity utilization above 80%: inflationary, rates up. IP collapse alongside weak ISM: strong recession signal, aggressive rate-cut pricing.