U.S. Industrial Production Rebounded More Than Expected in August
by:Sandy Batten
|in:Economy in Brief
Summary
- IP rebounded 0.8% m/m in August with downward revisions to June and July.
- Swing in auto production major factor; motor vehicle output soared 9.8% m/m in August after an 8.9% m/m collapse in July.
- Mining output also rebounded in August while utilities output was unchanged.
Total industrial production rebounded in August, rising 0.8% m/m (unchanged y/y) following a downwardly revised 0.9% decline in July (previously -0.6% m/m). The previously reported 0.3% m/m increase in June was revised to a 0.1% m/m gain. The Action Economics Forecast Survey expected a 0.4% monthly increase in August. The major factor behind the August rebound was a significant turnaround in motor vehicle production which jumped up 9.8% m/m in August after having slumped 8.9% m/m in July. Total IP excluding motor vehicles rose 0.3% m/m in August versus a 0.5% monthly decline in July.
Manufacturing output also rebounded in August, increasing 0.9% m/m (0.2% y/y) after a downwardly revised 0.7% m/m decline in July (previously -0.3% m/m). Mining activity posted a solid 0.8% m/m gain in August (0.1% y/y) following a downwardly revised 0.4% drop in July (previously unchanged). Utilities output was unchanged in August from July (-0.9% y/y) following a 3.0% m/m decline in July (previously -3.4% m/m).
Within the manufacturing sector in August, a 2.1% m/m increase in the production of durable goods lead the overall rise. As already noted, this reflected a sizable reversal in motor vehicles production. However, gains were widespread across major sectors with only “Miscellaneous” declining. Primary metals output increased 3.2% m/m; electrical equipment output rose 2.0% m/m; aerospace production increased 1.2% m/m. By contrast, production of nondurable goods fell 0.2% m/m in August, their first monthly decline in four months. The August decline was led by a 2.3% m/m drop in petroleum production though declines were relatively widespread across sectors. Apparel output fell 1.6% m/m, the second consecutive monthly decline after three monthly gains.
Production of selected high-technology industries increased 1.7% m/m (9.1% y/y) in August following a slightly downwardly revised 0.9% m/m gain in July (previously 1.0% m/m). Factory output excluding the high-tech sector rebounded strongly in August, rising 0.8% m/m (-0.1% y/y) following a downwardly revised monthly decline of 1.0% in July (previously -0.3% m/m). Manufacturing output excluding selected high-tech sectors rose 0.9% m/m in August after having declined in each of the previous two months. Manufacturing output excluding high-tech sectors and motor vehicles increased 0.2% m/m in August following monthly declines in both June and July.
Production of construction supplies rose 1.4% m/m (0.9% y/y) in August, more than reversing the 0.8% monthly decline in July. Materials production also rebounded in August, rising 0.9% m/m (0.3% y/y), exactly reversing their 0.9% fall in July and the first monthly gain in three months.
Total capacity utilization rose to 78.0% in August from 77.4% in July (revised down from 77.8%). The Action Economics Forecast Survey forecasted 77.9%. The capacity utilization rate for manufacturing increased to 77.2% in August from 76.6% in July (revised down from 77.2%).
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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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