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Economy in Brief

U.S. Industrial Activity Gain Is Moderate
by Tom Moeller  July 15, 2011

Following two months of slight decline, U.S. industrial production rose all of 0.2% last month. Earlier months' figures were revised down slightly. The latest figure was weaker than Consensus expectations for a 0.3% gain according to Action Economics. The gain in factory sector output was a more-moderate 0.1% as utility output rose.

Last month's gain in factory output owed to a 1.7% increase (8.3% y/y) in primary metals, a 0.8% rise (6.4% y/y) in textiles and a 0.6% gain (10.1% y/y) in machinery. Weakness elsewhere was widespread. Motor vehicle output fell 2.0% (+2.5% y/y), computers & electronic components fell 0.7% (+7.4% y/y) and electrical equipment fell 0.3% (+0.8% y/y). Materials output rose a stronger 0.5% (4.3% y/y).

Amongst the special aggregates offered by the Fed, production excluding the high-tech area rose 0.1% last month and 3.1% y/y. Less motor vehicles June output increased 0.3% (3.5% y/y) but excluding both of these industries, output also gained 0.3% (3.2% y/y).

Capacity utilization overall held steady at 76.7% but was up sharply versus the recession low of 67.3%. In manufacturing alone, utilization also was stable for the third month at 74.4%, up from the recession low of 64.4%. Overall capacity is estimated to have risen 0.4% y/y versus a 2.2% decline during 2010.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The IP database contains figures with more decimal precision and includes extensive lists of "relative importance" numbers for several breakdowns of production by industry and market group. The expectations figure is in the AS1REPNA database.

Industrial Production (SA, % Change) Jun May Apr Jun Y/Y 2010 2009 2008
Total Output 0.2 -0.1 -0.1 3.4 5.3 -11.2 -3.7
 Manufacturing 0.1 0.0 -0.4 3.7 5.4 -13.5 -5.0
   Consumer Goods 0.0 -0.2 -0.1 1.4 4.3 -7.2 -5.2
   Business Equipment -0.7 1.2 -0.2 7.7 7.7 -16.3 -2.5
   Construction Supplies 0.3 1.2 0.1 3.9 3.8 -22.5 -9.7
 Materials 0.5 0.0 -0.1 4.3 6.3 -11.6 -2.7
 Utilities 0.9 -2.0 1.3 -1.5 4.0 -2.6 -0.1
Capacity Utilization (%) 76.7 76.7 76.8 74.5 74.5 69.1 77.8
 Manufacturing 74.4 74.4 74.4 71.7 71.7 66.2 74.9
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