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Economy in Brief

U.S. Factory Output Posts a Strong Increase
by Tom Moeller  August 15, 2014

Production in the manufacturing sector jumped 1.0% (4.9% y/y) during July after increasing 0.3% during the prior two months, last month reported as 0.1% for June and 0.4% for May. Overall industrial output in the U.S. increased 0.4% during July following a 0.4% June rise, revised from 0.2%. The monthly increase was held back by a 3.4% decline (-1.0% y/y) in utility output. A 0.3% gain in total production was expected in the Action Economics Forecast Survey.

Consumer goods output rose 0.5% (4.2% y/y) following a 0.2% rise. Automotive products production jumped 8.5% (19.8% y/y) following a 0.3% uptick. Appliances, furniture & carpeting production increased 1.8% (9.2% y/y) following strong increases in the prior four months. Computers & electronics output gained 1.5% (8.8% y/y) following three strong monthly gains. Amongst soft-goods industries, output fell 0.7% (+2.1% y/y). Paper output declined 1.4% (-3.2% y/y) and food & tobacco production was off 0.6% (+2.0% y/y). These declines were offset by clothing production which rebounded 2.0% (5.0% y/y) after three months of decline. Chemical output nudged 0.1% higher (2.4% y/y). Business equipment production jumped 1.3% (7.0% y/y after a 0.3% slip.

Within the special aggregate series, high technology industries posted a 1.3% production gain (8.3% y/y), paced by a 1.6% rise (11.4% y/y) in semiconductors. Factory production excluding the high-tech sector rose 0.9% (4.8% y/y). Manufacturing production excluding both high-tech and autos gained 0.3% (3.6% y/y).

The capacity utilization rate nudged up to 79.2% last month, about where it's been for four straight months. That remained below the 80.5% high averaged in 2007. In the factory sector, the capacity utilization rate jumped to 77.8%, its highest level since February 2008. Total industry capacity rose an improving 2.7% y/y while factory sector capacity increased 2.0%.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figure is in the AS1REPNA database.

Industrial Production (SA, % Change) Jul Jun May Jul Y/Y 2013 2012 2011
Total Output 0.4 0.4 0.3 5.0 2.9 3.8 3.3
Manufacturing 1.0 0.3 0.3 4.9 2.7 4.1 3.3
  Consumer Goods 0.5 0.2 -0.5 4.2 2.4 1.7 1.5
  Business Equipment 1.3 -0.3 0.7 7.0 3.6 7.5 5.6
  Construction Supplies 0.8 0.7 1.3 5.3 4.2 4.6 3.0
Materials 0.3 0.7 0.6 5.6 3.2 4.5 4.7
Utilities -3.4 -0.7 0.0 -1.0 2.1 -2.1 -0.2
Capacity Utilization (%) 79.2 79.1 79.0 77.5 78.0 77.3 76.3
 Manufacturing 77.8 77.2 77.1 75.6 76.1 75.5 73.9
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