Global| Jul 17 2018U.S. Industrial Production Remains Volatile
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve reported that industrial production increased 0.6% (3.8% y/y) during June following a 0.5% May decline, revised from -0.1%. April's 1.1% rise was stronger than reported earlier. The June rise matched expectations [...]
The Federal Reserve reported that industrial production increased 0.6% (3.8% y/y) during June following a 0.5% May decline, revised from -0.1%. April's 1.1% rise was stronger than reported earlier. The June rise matched expectations in the Action Economics Forecast Survey. Factory sector production recovered 0.8% (2.0% y/y) last month after a 1.0% decline during May, revised from -0.7%. Utility output weakened 1.5% (+5.0% y/y) after a 0.7% fall. Mining production rose 1.2% (13.0% y/y) following a 2.2% strengthening.
The rebound in production reflected a 0.7% gain (2.5% y/y) in consumer goods output which partially reversed the prior month's 1.9% decline. Durable consumer goods production rose 3.8% (2.4% y/y) after a 4.3% fall. Automotive product output recovered 7.4% (3.6% y/y) and reversed virtually all of May's drop. Computer, video & related production improved 1.1% (5.7% y/y) after a 0.4% rise. Appliance, furniture & carpeting production gained 0.2% (-2.8% y/y) after the prior month's 1.3% decline.
Nondurable consumer goods production eased 0.1% (+2.6% y/y) following a 1.3% decline. Energy product output fell slightly (4.8% y/y) after a 3.6% fall. Apparel production declined 3.1% (-1.8% y/y) after a 1.4% fall. Food & tobacco production eased 0.3% (+1.8% y/y), the third decline in four months. Paper product output held steady (-0.7% y/y) after a 1.2% decrease. To the upside was chemical product production by 0.2% (3.0% y/y), the third consecutive monthly rise.
Production of business equipment improved 2.1% last month (2.3% y/y) and reversed May's 2.0% decline. Transit equipment production strengthened 5.9% (0.4% y/y) and reversed a 5.3% drop. Production of information processing equipment rose 1.3% (5.0% y/y) following a 0.7% shortfall. Industrial equipment & other equipment production gained 0.7% (2.0% y/y) after declines in four of the prior five months.
Construction supplies output weakened 0.6% (+3.2% y/y) after a 0.3% increase.
Production of materials improved 0.5% (5.4% y/y) for the second straight month. Energy materials output increased 0.4% (10.9% y/y) after three months of strong increase. Durable goods materials output rose 0.5% (2.9% y/y) following a 1.0% decline and nondurable goods materials also improved 0.5% (0.4% y/y) following a 0.6% decline.
In the special aggregate groupings, production of selected high-technology industries rose 1.4% (7.5% y/y) following stability in May. Nonenergy production excluding high-tech advanced 0.7% (1.8% y/y) after a 1.1% decline. Factory sector production excluding both high-tech and autos improved 0.2% (1.6% y/y) after a 0.4% decline.
Capacity utilization rose to 78.0%, up from its 2016 low of 75.0%. Factory sector capacity utilization improved to 75.5% from 75.0% in May. Manufacturing sector capacity increased 1.1% y/y.
Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figure is in the AS1REPNA database.
Semiannual Monetary Policy Report to the Congress by Federal Reserve Board Chairman Jerome H. Powell is available here.
| Industrial Production (SA, % Change) | Jun | May | Apr | Jun Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Total Output | 0.6 | -0.5 | 1.1 | 3.8 | 1.6 | -2.0 | -1.0 |
| Manufacturing | 0.8 | -1.0 | 0.5 | 2.0 | 1.2 | -0.8 | 0.1 |
| Consumer Goods | 0.7 | -1.9 | 1.6 | 2.5 | 0.0 | 0.7 | 1.5 |
| Business Equipment | 2.1 | -2.0 | 1.1 | 2.3 | 3.2 | -5.3 | -2.0 |
| Construction Supplies | -0.6 | 0.3 | 0.5 | 3.2 | 2.5 | 0.9 | 0.6 |
| Materials | 0.5 | 0.5 | 0.9 | 5.4 | 2.0 | -3.0 | -1.5 |
| Utilities | -1.5 | -0.7 | 5.7 | 5.0 | -1.3 | -0.4 | -0.8 |
| Mining | 1.2 | 2.2 | 0.7 | 13.0 | 6.4 | -9.7 | -3.4 |
| Capacity Utilization (%) | 78.0 | 77.7 | 78.2 | 76.2 | 76.1 | 75.4 | 77.3 |
| Manufacturing | 75.5 | 75.0 | 75.8 | 74.8 | 74.8 | 74.6 | 75.8 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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