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Economy in Brief

U.S. Industrial Production Rose
by Tom Moeller August 15, 2008

For July, industrial production rose 0.2% after an unrevised 0.5% gain during June. Consensus expectations had been for no change in output last month.

Utility output reversed its June increase and fell by 1.8% as the summer heat moderated.

Factory output increased 0.4% which was its best monthly increase since last September. In addition, the three-month rate change improved to 2.2% (AR) which was its best since since last September. Output of motor vehicles & parts was strong during the last two months and rose 3.6% (-10.4% y/y) after a 4.8% June increase. The strike was settled at American Axel company.

The trend in output outside the high-tech sector has been decidedly weak due to that strike. Less high-tech, factory output did repeat its June rise of 0.2% and three-month output growth rose to 1.9% (AR). But the industry detail continued mixed. July output of furniture fell 0.9% and at a 7.0% rate during the last three months. Apparel output dropped 0.5% last month. To the upside was output of electrical equipment rose at a 4.2% rate during the last three months. Machinery output recovered some of its earlier weakness with a 2.5% rise during the last three months.

Production in the high tech sector rose 0.3% (17.4% y/y) during July but that y/y growth was down from the peak in March of 27.6%. Production of computers & office equipment rose 0.7% (15.4% y/y) but the three-month growth rate is slower at 6.9% (AR). Output of communications equipment fell 0.2% last month and three-month growth was a negative 1.4%.

Capacity utilization ticked up to 79.9%. Utilization in the factory sector rose to 77.8%, near its lowest also since late-2004.

Will Farmland Values Keep Booming? from the Federal Reserve Bank of Kansas City can be found here.

INDUSTRIAL PRODUCTION (SA, %) July June Y/Y 2007 2006 2005
Total Output 0.2 0.5 -0.2 1.7 2.2 3.3
   Manufacturing 0.4 0.1 -1.1 1.7 2.4 4.0
     Consumer Goods 0.3 0.9 -1.1 1.7 0.3 2.8
     Business Equipment 0.8 0.2 1.2 3.3 10.4 7.3
     Construction Supplies 0.2 -0.2 -5.3 -2.5 2.2 4.5
  Utilities -1.8 2.2 2.6 3.3 -0.6 2.1
Capacity Utilization 79.9 79.8 81.4 81.0 80.9 80.2
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