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Economy in Brief

U.S. Industrial Production Ramps Up for Second Consecutive Month
by Tom Moeller  July 15, 2020

• Manufacturing output gains are broad-based in June.

• Auto output is exceptionally strong followed by high-tech production.

• Capacity utilization markedly increases.

Industrial production increased 5.4% in June (-10.8% y/y) after an unrevised 1.4% May gain. The record 12.7% April decline was little-revised. A 4.0% increase had been expected in the Action Economics Survey.

Manufacturing production gained 7.2% in June (-11.1% y/y) after rising 3.8% in May. Output of durable goods jumped 11.7% (-14.3% y/y) led by a 105.0% surge in motor vehicles production. Despite this second straight month of triple-digit increase, motor vehicle output remained down by roughly one-quarter y/y. Capacity utilization in the auto sector was just 59.0%. Computer & electronic product production surged 5.5% (2.0% y/y) while electrical equipment output gained 1.6% (-10.1% y/y). Machinery production rose 6.4% (-15.8% y/y) and furniture output gained 5.3% (-14.0% y/y). Nondurable goods production improved 3.3% (-7.4% y/y) led by a 10.5% rise (-14.9% y/y) in apparel production. Chemical output gained 1.8% (-3.5% y/y) and petroleum & coal production increased 4.3% (-16.8% y/y).

Output of business equipment improved 11.8% (-18.2% y/y) in June after a 7.4% May increase. Information processing equipment production strengthened 7.4% (3.3% y/y) while output of transit equipment jumped by roughly two-thirds (-48.4% y/y).

Capacity utilization rose to 68.6% in June, up from 65.1% in May. The Action Economics Survey expected 67.4%. Factory sector utilization increased to 66.9% of capacity which grew a reduced 0.6% y/y. During all of 2019, manufacturing capacity grew 1.5%

Industrial production and capacity and oil prices are located 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) Jun May Apr Jun Y/Y 2019 2018 2017
Total Output 5.4 1.4 -12.7 -10.8 0.9 4.0 2.3
Manufacturing 7.2 3.8 -15.9 -11.1 -0.2 2.3 2.0
   Durable Goods 11.6 6.8 -21.9 -14.3 0.7 3.4 2.2
     Motor Vehicles 105.0 120.0 -76.3 -24.7 -2.3 4.1 -0.0
     Selected High Tech 1.8 -0.4 -2.8 1.8 5.1 6.4 2.6
   Nondurable Goods 3.4 1.4 -10.0 -7.4 -0.7 1.9 1.9
Utilities 4.2 -3.5 1.9 0.6 -0.8 4.4 -0.8
Mining -2.9 -6.1 -6.8 -16.9 7.1 12.4 7.4
Capacity Utilization (%) 68.6 65.1 64.2 77.7 77.8 78.7 76.5
   Manufacturing 66.9 62.3 60.0 75.7 75.6 76.6 75.1
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