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Economy in Brief

U.S. Industrial Production Is Strong Again
by Tom Moeller June 16, 2010

The recovery in industrial output due to improved final demand and inventory replenishment continued last month. Overall production rose 1.2% after a little revised 0.7% increase during April. It's up at an 8.1% annual rate so far this year. These gains understate the degree of improvement following last year's recession. In the factory sector alone output rose 0.9% during the last two months and it has risen at a 9.5% rate so far this year.  

Strength in output last month was across-the-board amongst major industry groupings. In individual industries, output of motor vehicles rose 5.5% last month and by more than one-third y/y. Output of computers also posted a firm 1.4% increase (14.3% y/y) while machinery output rose 1.9% (13.3% y/y).

Output of appliances and furniture slipped after a strong April (+3.6% y/y). The level of production was one-third below the 2005 peak. Apparel output rose just 0.5% last month (7.9% y/y) and remained off by two-thirds from 1994 as production has moved out of the country.

Capacity utilization rose further to 74.7%, its highest level since November 2008. In the factory sector alone, utilization rose to 71.5%, the highest level since November 2008 and up from the 2009 low of 65.1%.

The industrial production data are available in Haver's USECON database.

Industrial Production (SA,%) May April March May y/y 2009 2008 2007
Total Output 1.2 0.7 0.3 7.6 -9.7 -2.2 1.5
Manufacturing 0.9 0.9 1.2 7.9 -11.3 -3.2 1.4
Consumer Goods 1.1 0.0 0.4 6.3 -5.2 -2.6 0.9
Business Equipment 1.3 1.7 1.1 10.1 -12.4 -1.1 2.7
Construction Supplies 0.7 3.0 2.4 3.9 -17.8 -6.3 -2.0
Materials 1.4 0.8 -0.1 9.2 -10.9 -1.9 2.0
Utilities 4.8 -1.3 -6.2 4.2 -2.5 0.3 3.4
Capacity Utilization (%) 74.7 73.7 73.1 68.5(May '09) 70.1 77.5 80.6
Factory Utilization 71.5 70.8 70.1 65.3 66.8 75.1 79.0
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