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Economy in Brief

U.S. Industrial Production Increases Modestly; Factory Output Slips
by Tom Moeller  August 17, 2017

Industrial production improved 0.2% during July (2.2% y/y) following an unrevised 0.4% June gain. A 0.3% increase had been expected in the Action Economics Forecast Survey. A 1.6% rise (-0.7% y/y) in utilities output accounted for most of the total increase. Factory output slipped 0.1% (+1.3% y/y), down for the third month in the last five. Mining production rose 0.5% (10.2% y/y) after a 2.0% jump.

The decline in factory sector production occurred as business equipment production fell 0.5% (+0.8% y/y). Transit equipment output declined 2.9% (-3.0% y/y) but production of information processing equipment rose 0.6% (4.5% y/y). Consumer products production improved 0.2% (0.3% y/y). Nondurable goods output increased 0.8% both m/m and y/y. A 1.4% jump (0.3% y/y) in chemical products output accompanied a 1.0% rise (-7.0% y/y) in clothing production. Paper products production fell, however, by 0.2% (+1.4% y/y). Production of durable consumer products declined 1.9% (-1.5% y/y) as motor vehicle production dropped 3.2% (-4.0% y/y). Appliance and furniture output also fell 2.1% (-0.5% y/y), but computer video & audio product production rose 2.4% (1.8% y/y). Construction supplies production fell 0.4% (+2.3% y/y).

Materials production rose 0.3% (3.5% y/y) reflecting a 0.2% gain (3.6% y/y) in nondurable consumer goods materials output. Durable materials production declined 0.3% (+1.1% y/y). Production of energy materials jumped 0.9% (5.6% y/y), up from declines during the last two years.

In the aggregate groupings, selected high-technology product production declined 0.1%, pulled lower by a 2.0% drop (+14.7% y/y) in computer & peripherals production. Communication equipment production rose 0.7% (-0.7% y/y). Factory production excluding both motor vehicles and high-tech products rose 0.3% (1.6% y/y).

Capacity utilization held steady m/m at 76.7%, but that was up from 75.9% last July. Factory sector utilization eased m/m to 75.4%, up slightly y/y from 75.1%. Factory sector capacity rose 0.7%, while excluding the high-tech sector it gained 0.5% y/y.

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.

The minutes to the latest FOMC meeting can be found here.

0Industrial Production (SA, % Change) Jul Jun May Jul Y/Y 2016 2015 2014
Total Output 0.2 0.4 0.0 2.2 -1.2 -0.7 3.1
Manufacturing -0.1 0.2 -0.6 1.3 -0.0 0.1 1.2
    Consumer Goods 0.2 -0.7 0.6 0.3 0.6 2.3 0.8
    Business Equipment -0.5 0.5 -1.9 0.8 -1.8 -0.9 1.9
    Construction Supplies -0.4 0.0 -0.8 2.3 1.3 0.5 3.4
  Materials 0.3 1.0 0.1 3.5 -2.3 -1.4 5.1
Utilities 1.6 -1.2 2.8 -0.7 -0.3 -0.7 1.4
Mining 0.5 2.0 1.0 10.2 -9.1 -4.3 10.7
Capacity Utilization (%) 76.7 76.7 76.5 75.9 75.7 76.8 78.6
 Manufacturing 75.4 75.5 75.4 75.1 75.1 75.5 75.4
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