Wednesday, November 16, 2011

Capacity Utilization vs. Inflation

Marketwatch details:

The output of the nation’s factories, mines and utilities rose 0.7% in October, the Federal Reserve said Wednesday in another sign the manufacturing industry is still expanding.

The October gain was the biggest since July and was stronger than the 0.4% increase expected by analysts.


Source: BLS / Federal Reserve

3 comments:

  1. Nonetheless, it seems there must be something wrong with the 'excess demand as the cause of inflation' story, don't you think?

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  2. An increase in capacity utilization is not necessarily caused by excess demand. It can also be caused by supply destruction and/or not enough investment.

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