US utilities output decline leaves US Q4 GDP tracking at 1.7%

US November industrial production dropped 0.6%, fell more than market consensus expectations, with utilities output declining sharply -4.3% month on month.

There was a decline in the electricity utility output by 3.7% mom and natural gas utility production by 9.6%mom. Less demand for electricity and natural gas was caused due to unreasonably warm weather, temperature data from NOAA confirms that that population-weighted temperatures were well above normal in November. 

November industrial production came in close to expectations, manufacturing production was steady mom. Motor vehicles and parts production also dropped, along with overall durable goods manufacturing slipping 0.2% mom.

"..data through November suggest Q4 will see another sequential contraction in energy extraction investment...At 1.7% of total consumer spending, this drop in estimated utilities consumption trimmed our tracking estimate of Q4 real PCE growth to 2.5%. Our Q4 GDP tracking estimate fell two-tenths to 1.7% as a result", says Barclays in a research note. Add to Anti-Banner