Capacity Utilization is an economic indicator that measures the percentage of a country's total productive capacity currently being used in manufacturing. It is closely watched by traders as high utilization rates can signal inflationary pressure, while low rates may indicate economic slack. In the US, the Federal Reserve publishes this data monthly, and readings consistently above 80% have historically been associated with rising inflation.
Example
“Capacity utilization hit 79.6% last month, approaching the threshold that often triggers concerns about inflationary overheating.”