The industrial production index measures the monthly level of the physical output of the manufacturing, mining, and gas and electric utility industries. When industrial production is down, it indicates a slowing of economic growth and, therefore, the Federal Reserve is inclined to allow interest rates to drop to stimulate the economy. Bond Market Moves Up In Price.

The IPI is an economic indicator which measures real production output. It is expressed as a percentage of real output with base year currently at 2002. Production indexes are computed mainly as fisher indexes with the weights based on annual estimates of value added.