Capacity Utilization Can’t Break Loose

The Lehmann Letter (SM)

On May 16 the Federal Reserve reported April’s capacity utilization at 76.7%:

http://www.federalreserve.gov/releases/g17/Current/default.htm

The chart reveals that capacity utilization reached 80% before the Great Recession and 85% during the 1980s and 1990s expansions.

Now it’s stalled in the high 70s. Why?

Partly it’s the oil and gas bust. Partly it’s the deindustrialization of America.

Capacity Utilization

(Recessions shaded)

Here’s capacity utilization’s recent record.

2013

January        77.4

February       77.8

March           78.0

April              77.8

May              77.8

June             77.8

July              77.5

August          77.8

September    78.3

October        78.2

November     78.5

December     78.4

2014

January        78.1

February       78.8

March           79.1

April              79.0

May              79.1

June             79.2

July              79.3

August          79.1

September    79.4

October        79.1

November     79.8

December     79.6

2015

January        79.1

February       79.0

March           78.2

April              77.9

May              77.5

June             77.4

July              78.0

August          77.9

September    77.9

October        77.7

November     77.0

December     76.7

2016

January        75.8

February       75.4

March           74.9

April              75.2

May              75.1

June             75.4

July              75.8

August          75.3

September    75.4

October        75.7

November     75.5

December     76.0

2017

January        75.7

February       75.7

March           76.1

April              76.7

Questions or comments? Contact Mike Lehmann at lehmannm@usfca.edu.

(To be fully informed visit http://www.beyourowneconomist.com/)

© 2017 Michael B. Lehmann