Indications of too high a growth rate produce calls for increases in interest rates. Evidence of a slow-down reduces the need for increases in interest rates to slow demand. Statistics on industrial production and capacity-utilization provide monthly indications of economic growth. The Federal Reserve reported that industrial production in February was slower than expected. Production by the nation's factories, mines and utilities increased by 0.3 percent compared to a forecasted gain of 0.5 percent for the month.
Capacity utilization is a measure of total output compared to estimated capacity.
According to the Federal Reserve, businesses operated at 81.7 percent of capacity in February, the same as in January. A capacity utilization of 85 percent is considered to be an indication of production bottlenecks and inflationary pressures. As capacity utilization increases, so does the risk of higher inflation. The decrease, as reported by the Commerce Department, shows that consumer demand is still robust. Statistics on Industrial Production are reported monthly.