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Economy in Brief

Industrial Production's Rise Is Modest As Automakers Scale Back
by Tom Moeller   September 15, 2010

Last month's modest 0.2% gain in industrial production suffered from lower output of motor vehicles and matched Consensus expectations. However, overall forward momentum has lagged of late. The latest increase followed a downwardly revised 0.6% July gain and monthly increases as high as 1.4% back to July of last year.

Factory sector output ticked up just 0.1% last month after a 0.8% July gain that was initially reported as 1.1%. The weakness was led by lower durable consumer goods production, which dropped 3.0% (+9.5% y/y) due to a 5.0% drop (+19.3% y/y) in auto output. Other durable goods sectors, however, suffered as well. Furniture output was off 1.9% m/m but still rose 2.3% y/y. Nondurable goods output recovered 0.5% (3.4% y/y) as apparel production jumped 1.5% (4.2% y/y) and recovered all of its July decline. Despite the hot summer, utilities output fell 1.6% but remained up 6.0% y/y due to strong gains this spring.

Capacity utilization ticked higher to 74.7% and remained well above last year's low of 68.2%. Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database.

Industrial Production (SA, % Change) August July June Year Ago 2009 2008 2007
Total Output 0.2 0.6 0.1 6.2 -9.3 -3.3 2.7
  Manufacturing 0.1 0.8 -0.3 6.2 -11.1 -4.5 2.9
     Consumer Goods -0.4 0.7 -0.1 4.4 -5.8 -4.2 0.9
     Business Equipment 0.6 1.0 0.8 9.9 -12.2 -1.5 4.5
     Construction Supplies 0.8 -0.4 0.1 5.0 -16.7 -9.5 -1.2
  Materials 0.3 0.6 0.0 7.0 -9.7 -2.7 3.7
  Utilities -1.6 -0.3 3.9 6.0 -2.6 -0.1 3.4
Capacity Utilization (%) 74.7 74.6 74.1 70.0 70.0 77.9 81.3
  Manufacturing 72.2 72.1 71.6 67.6 67.2 75.0 79.6
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