IB Net Payout Yields Model

Stat of the Day: Industrial Production Increases 0.7%

Industrial production continues to increase at a solid clip per the Federal Reserve report released this morning. While the market fretted during the summer about a double dip recession, the 1.2% increase in July was telling a different story. Now after a couple of flat months, industrial production has soared another 0.7% for October. This makes the year over year increase at 3.9%.

Capacity utilization ticked up to 77.8 from 77.3 also beating estimates. Interesting to note that this level of utilization is still below the '90-91 recession low of 78.8. Still lots of room for industrial companies to increase profits before having to expand.

The major group that continues to stick out is the 10.2% increase in business equipment. Also noteworthy is that it has been up over 1% sequentially in four of the last six months.

Typically this isn't a report that I review very heavily, but it caught my attention that growth remains strong and the numbers continue to beat estimates. Not exactly the type of report most investors would expect considering all the negative headlines regarding Europe. When one does the research, the numbers are much more impressive and supportive of higher equity prices.

9:16 AM Oct. Industrial Production: +0.7% vs. +0.4% expected, -0.1% prior (revised). Capacity utilization 77.8% vs. 77.6% expected, 77.4% prior.


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