U.S. Industrial Production Declines During July
by:Tom Moeller
|in:Economy in Brief
Summary
- Factory production falls moderately; utility output plunges.
- Mining output holds steady.
- Capacity utilization declines sharply.
Total industrial production declined 0.6% during July (-0.2% y/y) after increasing 0.3% in June, revised from 0.6%. Production moved 0.8% higher in May, revised from 0.9%. The Action Economics Forecast Survey expected a 0.3% monthly decline. Manufacturing output fell 0.3% (+0.1% y/y) after holding steady in June, revised from a 0.4% increase. Factory output rose 0.8% in May, revised from 1.0%. Mining activity held steady last month (-1.5% y/y) after easing 0.1%, revised from a 0.3% rise, following a 0.1% dip in May, revised from a 0.7% monthly decline. Utilities output fell 3.7% (-0.1% y/y) after a 2.6% June increase, revised from 2.8%, and a 2.2% May rise, revised from 1.9%.
Within the manufacturing sector in July, durable goods production declined 0.9% (-1.6% y/y) last month following a 0.5% weakening in June. Motor vehicle production plummeted 7.8%, while production of electrical equipment & appliances eased 0.7%. Production of fabricated metal products also fell 0.7%. In contrast, machinery output rose 1.4% and production of computers & electronic products increased 1.5%. Production of nondurable goods increased 0.4% (1.9% y/y), the same as in June. Apparel production fell 1.8% last month and reversed the June increase, while petroleum production surged 1.7%. Chemical output rose 0.5%.
Production of selected high-technology industries strengthened 1.0% in July (7.3% y/y) following a 0.9% June decline. Factory output excluding the high tech sector declined 0.3% after holding steady in June. Manufacturing output excluding motor vehicles increased 0.3% after holding steady in June. Manufacturing output excluding selected high-tech industries and motor vehicles also rose 0.3% in July after remaining unchanged in June.
Production of construction supplies fell 0.3% (-0.2% y/y) in July, and reversed its June rise. Materials output fell 0.7% (-0.4% y/y) in July after a 0.1% rise in June.
Total capacity utilization declined to 77.8% in July after rising to 78.4% in June, revised from 78.8%. The Action Economics Forecast Survey forecasted 78.5%. The capacity utilization rate for manufacturing fell to 77.2% in July from a downwardly revised 77.5% in June.
Industrial production and capacity data are in Haver’s USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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