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Economy in Brief

U.S. Industrial Production Continues to Strengthen in August
by Tom Moeller  September 15, 2021

• Increase held back by hurricane damage.

• High-tech sector remains strong.

• Capacity utilization increases again.

Industrial production rose 0.4% (5.9% y/y) during August following a 0.8% July increase, revised from 0.9%. The Fed indicated that the gain was held back by 0.3 percentage points due to damage caused by Hurricane Ida. The latest increase matched expectations in the Action Economics Forecast Survey.

Manufacturing output advanced 0.2% in August (5.9% y/y) following a 1.6% July gain, revised from 1.4%. Motor vehicle production edged 0.1% higher (-4.9% y/y) after surging 9.5% in July. Excluding the motor vehicle sector, factory output rose 0.2% (6.8% y/y) after a 1.1% rise. In other durable goods industries, production of electrical equipment, appliances & components fell 1.2% in August (+9.6% y/y) after rising 3.9% in July. Machinery output declined 0.8% (+9.8% y/y) after surging 3.3% in July. Output of computers & electronic products strengthened 1.2% (10.0% y/y) after rising 1.5%.

In the nondurable goods sector, production improved 0.1% (5.2% y/y) after an unrevised 0.3% July increase. Chemical production fell 0.5% (+7.2% y/y) after a 0.4% increase. Petroleum & coal product output rose 0.6% (15.0% y/y) after July's 0.3% increase. Food, beverage & tobacco output rose 0.4% (0.3% y/y) after two months of decline, while textile production weakened 0.8% (+5.8% y/y) in August after a 0.6% gain. Apparel production improved 0.4% (8.6% y/) after rising 0.2%.

Utilities production increased 3.3% (2.1% y/y) in August after July's 4.0% drop. Electric power output fell rose 3.9% (2.6% y/y) while natural gas distribution eased 0.3% (-0.8% y/y). Mining output fell 0.6% (+10.3% y/y) after a 1.0% rise in July.

Capacity utilization rose to an expected 76.4% in August from 76.2% in July. The latest level was the highest since December 2019. In manufacturing, utilization rose to 76.7% last month from 76.6% in July. Factory sector capacity rose 0.2% y/y.

Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization 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 2020 2019 2018
Total Output 0.4 0.8 0.5 5.9 -7.2 -0.8 3.2
Manufacturing 0.2 1.6 -0.3 5.9 -6.4 -1.9 1.5
   Durable Goods 0.1 2.8 -0.2 7.1 -8.2 -2.0 3.1
     Motor Vehicles 0.1 9.5 -5.0 -4.9 -15.7 -3.0 4.1
     Selected High Tech 1.0 0.0 -0.1 13.2 7.1 3.9 9.0
   Nondurable Goods 0.1 0.3 -0.2 5.2 -4.4 -1.8 -0.3
Utilities 3.3 -4.0 6.2 2.1 -3.4 -0.8 4.9
Mining -0.6 1.0 0.3 10.3 -14.2 5.9 13.0
Capacity Utilization (%) 76.4 76.2 75.6 72.3 71.6 77.4 79.2
   Manufacturing 76.7 76.6 75.4 72.3 71.2 75.8 77.7
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