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Economy in Brief

U.S. Industrial Production Strengthens
by Tom Moeller  September 17, 2019

Industrial production rebounded 0.6% (0.4% y/y) during August following a 0.1% easing in July, revised from -0.2%. A 0.2% gain had been expected in the Action Economics Forecast Survey. Factory sector output improved 0.5% (-0.5% y/y) and reversed July's 0.4% decline. Production in the mining sector also reversed July's decline with a 1.4% increase (5.1% y/y). Utilities output rose 0.6% (-0.8% y/y) following a 3.7% jump.

Output of final products increased 0.4% (0.1% y/y) following a 0.1% easing. Consumer goods production gained 0.2% (-0.4% y/y). Nondurable goods output rose 0.3% (-0.5% y/y) despite the fact that apparel production dropped 1.2% (-10.6% y/y). Textile mill production improved 0.1% (-3.8% y/y). Petroleum & coal product production posted a 0.3% drop (-2.2% y/y). Chemical output increased 1.1% (-1.2% y/y) but food, beverage & tobacco product production slipped 0.1% (-0.4% y/y). Durable goods production increased 0.5% (0.6% y/y), bolstered by a 1.6% strengthening (2.0% y/y) in machinery output. Computer & electronic product production gained 0.4% (4.4% y/y) but motor vehicle production fell 0.5% (+0.5% y/y). Business equipment production rose 1.0% (0.3% y/y) as industrial & other production surged 1.7% (-0.4% y/y). Information processing & other equipment output improved 0.2% (5.0% y/y).

Materials production increased 0.9% (0.7% y/y) as durable goods output rose 0.6% (-0.1% y/y) and nondurable materials production gained 0.4% (2.7% y/y). Energy materials production strengthened 1.3% (3.5% y/y).

In the special aggregate groupings, production of computers, communications equipment & semiconductors rose 0.8% (1.9% y/y). The latter strengthened 1.4% (1.2% y/y) while computers & peripheral output fell 0.4% (-3.3% y/y). Factory output excluding high-tech and motor vehicles rose 0.6% (-0.6% y/y).

The capacity utilization rate rose to 77.9% and recovered July's decline. It remained  below the November 2018 high of 79.6%. The factory sector utilization rate increased to 75.7% but remained below the December 2018 high of 77.3%. Factory sector capacity increased 1.2% 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) Aug Jul Jun Aug Y/Y 2018 2017 2016
Total Output 0.6 -0.1 0.1 0.4 3.9 2.3 -2.0
Manufacturing 0.5 -0.4 0.6 -0.5 2.3 2.0 -0.8
    Consumer Goods 0.2 0.1 0.6 -0.4 2.1 0.5 0.6
    Business Equipment 1.0 -0.6 0.6 0.3 3.2 3.6 -5.3
    Construction Supplies 0.9 -1.2 0.7 1.0 2.8 3.5 0.9
  Materials 0.9 -0.1 -0.2 0.7 5.9 2.7 -3.0
Utilities 0.6 3.7 -4.1 -0.8 4.4 -0.8 -0.4
Mining 1.4 -1.6 0.5 5.1 12.4 7.4 -9.9
Capacity Utilization (%) 77.9 77.5 77.8 79.3 78.7 76.5 75.0
  Manufacturing 75.7 75.4 75.8 77.0 76.6 75.1 74.2
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