U.S. Industrial Production Increase Is Broad-Based in July
by:Tom Moeller
|in:Economy in Brief
Summary
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Consumer product output led by autos.
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Transit equipment leads business output gain.
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Capacity utilization rebounds following two months of decline.
The factory sector continues to improve, despite weakness in business activity elsewhere in the economy. Industrial production increased 0.6% (3.9% y/y) during July after holding steady in June, revised from a 0.2% decline. A 0.3% increase had been expected in the Action Economics Forecast Survey.
In industry groups, manufacturing production rose 0.7% (3.2% y/y) in July following two consecutive months of decline. Durable goods jumped 1.3% (4.4% y/y) after falling 0.5% in June. Motor vehicle & parts production strengthened 6.6% (13.3% y/y) after falling for two months. Fabricated metals production rose 2.1% (5.3% y/y) but primary metals production weakened 0.9% (-1.9% y/y). Machinery output rose 0.5% (0.7% y/y) but electrical equipment & appliance production fell 1.4% (+2.3% y/y). Computer & electronic product output eased 0.6% (+1.3% y/y). Nondurable goods production inched 0.1% higher last month (1.9% y/y) after a 0.4% decline. Apparel output strengthened 1.6% (6.2% y/y) and chemical output rose 0.5% (2.0% y/y). These gains were offset by a 0.9% drop (-0.2% y/y) in petroleum & coal production as well as a 0.1% easing (+1.9% y/y) in food & beverage output. Utilities output fell 0.8% (+2.2% y/y). In contrast, mining activity rose 0.7% (7.9% y/y).
In market groups, consumer goods output increased 0.6% (2.4% y/y) in July following two months of decline. Construction supplies rose 0.9% (5.0% y/y) while business equipment gained 0.6% (5.1% y/y). Transit equipment production rose 3.2% (9.2% y/y). Materials production rose 0.5% (3.9% y/y).
In the special classifications, factory output of selected high-tech industries improved 0.4% (8.9% y/y) in July after rising sharply in the prior two months. Factory production excluding selected high-tech industries rose 0.8% (3.1% y/y) after two successive 0.5% declines. Manufacturing production excluding both selected high-tech and motor vehicles & parts rose 0.3% (2.3% y/y) after falling for two straight months.
Capacity utilization improved to 80.3% in July, up from 78.7% at the end of last year. An 80.1% rate had been expected. Manufacturing capacity utilization rose to 79.8%, a three-month high and up from 78.6% in December.
Industrial production and capacity are located 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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