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Making sense of production figures

Do you want the optimistic take on the latest Mint coin production report or the pessimistic take?

Let’s start with the pessimism.

In December the U.S. Mint struck only cents, nickels and dimes.

Because of the high expenses incurred to make each cent and nickel, which cost 2.41 cents each and 11.18 cents each, respectively, the Mint clearly lost money on the 305.2 million cents and 52.08 million nickels that it cranked out in December.

Profit on the 74.5 million dimes, which runs 4.35 cents apiece, could not offset the loss on the two lower denominations.

By my back of the envelope calculations I get a loss for the cents and nickels of $7.489 million and a gain on the dimes of $3.24 million, leaving an aggregate loss of  $4.249 million.

That’s the bad news.

The good news if you believe coin output is a good indicator of economic health is that December 2011 output was quite a bit higher than December 2010 output.

The 2011 monthly figure is 431.78 million coins while the same month in the prior year was just 87 million coins. That’s a gain of 396 percent.

In both cases only cents, dimes and nickels were produced, so we can discount for this particular monthly comparison the the impact of the recent suspension of dollar coin production.

For the full calendar year of 2011, the Mint churned out 8,200,350,000 coins compared to 6,373,110,000 the year before, an increase of 28.67 percent.

So good news or bad news? Which way do you interpret the figures?

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