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Economy in Brief
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The value of construction put-in-place ticked down 0.1% m/m (+9.7% y/y) in May...
Developed Economies Manufacturing Sectors Hit Hard in June
Among the 18 countries in the table that report manufacturing PMI data in June, only four show m/m improvements...
U.S. Income Gained, Spending Slowed in May
Personal income growth remained solid while household spending slowed in May...
U.S. Chicago Business Barometer Falls Back in June to the Lowest Level since Aug. '20
The ISM-Chicago Purchasing Managers Business Barometer fell to 56.0...
U.S. Unemployment Claims Edged Down
Initial claims for unemployment insurance filed in the week ended June 25 declined by 2,000 to 231,000...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Sandy Batten August 14, 2020
• Manufacturing output gains were again broad-based in July though smaller than in June.
• Even with three monthly gains, total industrial production still 8.4% below pre-Covid peak.
• Another strong gain in auto output to nearly pre-Covid level.
Industrial production increased 3.0% m/m (-8.2% y/y) in July following an upwardly revised 5.7% m/m gain in June (initially +5.4%) and a 0.9% m/m rise in May. Even with the three consecutive monthly increases, IP remains 8.4% below its pre-Covid February level. The July reading was spot on the 3.0% rise expected by the Action Economics Survey.
Manufacturing production gained 3.4% m/m (-7.7% y/y) in July after rising an upwardly revised 7.4% in June. Most major industries posted increases though they were smaller than in June. Output of durable goods rose 5.5% m/m (-9.3% y/y) following a 11.9% m/m jump in June. The rebound continued to be led by surging motor vehicle production that had been decimated by the pandemic. Motor vehicles production increased 28.3% m/m (-1.4% y/y) on top of a 118.3% rise in June and a 111.0% gain in May These three outsized monthly gains have pushed motor vehicle output up to nearly its pre-Covid February level. Apart from motor vehicle production, the rest of factory output rose 1.6% m/m in July. Output of business equipment, an indicator of capital spending, increased 5.0% m/m (-13.9% y/y) in July, its third consecutive monthly increase, but is still 11% below its pre-Covid level.
The index for nondurables rose 1.3% m/m (-5.4% y/y) in July, a slowdown from the 3.5% gain in June. The July gain was led by more than 3% m/m increases in textile and product mills, printing, and petroleum products.
After having decreased for five consecutive months, mining output edged up 0.8% m/m (-17.0% y/y) in July. The output of utilities increased 3.3% m/m (+0.6% y/y) as warmer than usual temperatures increased the demand for air conditioning.
Capacity utilization rose to 70.6% in July from a downwardly revised 68.5% in June (initially 68.6%). This slightly exceeded the Action Economics Survey which had looked for capacity utilization to increase to 70.4%. Factory sector utilization increased to 69.2% in July from an unrevised 66.9% in June.
Industrial production and capacity 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) | Jul | Jun | May | Jul Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Total Output | 3.0 | 5.7 | 0.9 | -8.2 | 0.9 | 4.0 | 2.3 |
Manufacturing | 3.4 | 7.4 | 3.8 | -7.7 | -0.2 | 2.3 | 2.0 |
Durable Goods | 5.5 | 11.9 | 6.9 | -9.3 | 0.7 | 3.4 | 2.2 |
Motor Vehicles | 28.3 | 118.3 | 111.0 | -1.4 | -2.3 | 4.1 | 0.0 |
Selected High Tech | 1.6 | 2.1 | -0.3 | 4.6 | 5.1 | 6.4 | 2.6 |
Nondurable Goods | 1.3 | 3.5 | 1.3 | -5.4 | -0.7 | 1.9 | 1.9 |
Utilities | 3.3 | 2.0 | -0.5 | 0.6 | -0.8 | 4.4 | -0.8 |
Mining | 0.8 | -0.3 | -11.3 | -17.0 | 7.1 | 12.4 | 7.4 |
Capacity Utilization (%) | 70.6 | 68.5 | 64.8 | 77.4 | 77.8 | 78.7 | 76.5 |
Manufacturing | 69.2 | 66.9 | 62.3 | 75.3 | 75.6 | 76.6 | 75.1 |