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Economy in Brief

U.S. Industrial Production Rebounds
by Tom Moeller  June 14, 2019

The industrial sector exhibited life last month. Industrial production increased 0.4% (2.0% y/y) during May and recouped a 0.4% April decline, revised from -0.5%. Output has declined 0.9% since December. A 0.2% increase had been expected in the Action Economics Forecast Survey.

Manufacturing activity recovered 0.2% (0.7% y/y) during May following a 0.5% decline. Output is down 1.5% versus December. Utilities output rebounded 2.1% (0.3% y/y) last month after a 3.1% drop. Mining activity improved 0.1% (10.0% y/y) following a 2.2% increase.

The increase in manufacturing production reflected a 2.0% surge (2.8% y/y) in durable goods output, with motor vehicles production improving 3.4% (5.5% y/y). Appliance, furniture & carpeting production strengthened 1.7% (-2.0% y/y) and production of computers, video & audio products rose 1.1% (15.9% y/y). Nondurable goods output increased 0.1% (-0.7% y/y) as energy product production surged 1.5% (1.4% y/y). Chemical product output gained 0.2% (0.1% y/y, but production of clothing fell 1.4% (-13.5% y/y). Production of food & tobacco products eased 0.6% (-2.2% y/y). Business equipment production rose 0.2% (3.0% y/y) as industrial and other equipment rebounded 1.4% (2.4% y/y) following a sharp April decline. Production of information processing equipment rose 0.3% (5.2% y/y) but transit equipment declined 2.2% (+2.5% y/y).

Construction supplies' output improved 0.2% (0.3% y/y) following a 0.7% decline. Production of materials increased 0.3% (3.5% y/y) after a 0.5% rise.

In the special aggregate groupings, production of high technology products increased 0.3% (6.6% y/y). Semiconductor & electronic components gained 1.1% (7.3% y/y) and communications equipment edged 0.1% higher (17.0% y/y). Output in computer & office equipment declined 1.5% (-0.6% y/y). Factory sector production, excluding the motor vehicle and high tech sectors, held steady (0.1% y/y).

Capacity utilization rebounded to 78.1% in May and made up most of its April decline to 77.9%. Expectations in the Action Economics Forecast Survey called for 78.0%. The factory sector utilization rate rose to 75.7%. Mining sector capacity utilization eased to 91.3%, and remained below December's cycle high of 93.2%. Growth in capacity in the manufacturing sector continues to strengthen, up 1.1% y/y.

Industrial production and capacity data and US Population-Weighted Heating and Cooling Days are included in Haver's USECON database. Additional detail on production and capacity can be found in the IP database. The expectations figures come from the AS1REPNA database.

Industrial Production (SA, % Change) May Apr Mar May Y/Y 2018 2017 2016
Total Output 0.4 -0.4 0.1 2.0 4.0 2.3 -2.0
Manufacturing 0.2 -0.5 0.0 0.7 2.3 2.0 -0.8
    Consumer Goods 0.5 -1.4 0.6 0.1 2.1 0.5 0.6
    Business Equipment 0.2 -1.5 0.8 3.0 3.2 3.6 -5.3
    Construction Supplies 0.2 -0.7 0.1 0.3 2.8 3.5 0.9
  Materials 0.3 0.5 -0.2 3.5 5.9 2.7 -3.0
Utilities 2.1 -3.1 1.7 0.3 4.4 -0.8 -0.4
Mining 0.1 2.2 -0.4 10.0 12.4 7.4 -9.9
Capacity Utilization (%) 78.1 77.9 78.4 78.1 78.7 76.5 75.0
  Manufacturing 75.7 75.6 76.1 76.0 76.6 75.1 74.2
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