U.S. Industrial Production Strengthens in August
- Utilities output leads gain.
- Capital goods output increases, but consumer product production falls.
- Capacity utilization edges higher.
Total industrial production increased 0.4% (0.2% y/y) during August following a 0.7% July gain, revised from 1.0%. Production fell 0.4% in June, revised from -0.8%, according to the Federal Reserve Board. The August production index level equaled last September’s high. A 0.1% uptick in August had been expected in the Action Economics Forecast Survey.
By industry groups, a 0.9% rise (1.6% y/y) in electric power output was strong last month as air conditioners worked to reduce elevated temperatures. The gain followed a 5.9% July increase. Natural gas output also rose 0.5% last month (-1.3% y/y) as it followed a 3.8% decline in July. Mining output also rose a strong 1.4% (3.9% y/y) as it followed a 0.2% July decline.
Manufacturing production edged 0.1% higher (-0.6% y/y) in August following a 0.4% July rise, revised from 0.5%. Durable goods production edged 0.1% higher (0.6% y/y) following a 0.7% July increase. Motor vehicles & parts output fell 5.0% (+5.9% y/y) but machinery production rose 2.0% (-1.6% y/y). Computer & electronic product output rose 0.9% (4.1% y/y), while aerospace & miscellaneous transportation equipment production jumped 3.3% (4.9% y/y). Electrical equipment, appliances & components production fell 0.5% (-1.6% y/y) but furniture & related product production rose 1.3% (-7.3% y/y). Primary metals output gained 1.6% (0.7% y/y) while fabricated metal product production fell 0.4% (-0.9% y/y).
Nondurable goods production improved 0.2% in August (-2.0% y/y) after holding steady in July. Textiles & product production fell 2.4% (-5.3% y/y) while petroleum & coal product output rose 0.4% (0.7% y/y). Printing & related support activities output rose 1.3% (-5.4% y/y) while chemical production rose 1.0% (1.1% y/y). Paper production eased 0.3% (-6.5% y/y) while apparel & leather goods output fell 3.5% (-3.1% y/y).
By market groups, consumer goods output eased 0.2% (-0.4% y/y) in August after a 1.2% increase in July, reflecting a 2.4% decline (-0.8% y/y) in output of durable consumer goods and a 0.4% rise (-0.4% y/y) in output of nondurable consumer goods. Materials production rose 0.7% (1.2% y/y) and business equipment output rose 0.8% (0.1% y/y). Construction supplies production fell 0.4% (-2.5% y/y).
In special classifications, factory output of selected high-tech industries increased 0.8% (9.7% y/y) in August, the seventh straight m/m gain, following a 1.6% rise in July. Manufacturing production excluding selected high-tech industries improved 0.1% (-1.0% y/y) and manufacturing production excluding both selected high-tech and motor vehicles & parts rose 0.6% (-1.4% y/y).
Capacity utilization rose to 79.7% in August from a 79.5% in July. A rate of 79.3% had been expected. Manufacturing capacity utilization held steady at 77.9% in August and remained below the high of 79.9% in both March and April of last year.
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.
Tom MoellerAuthorMore 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.