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Economy in Brief

U.S. Industrial Production Increase Is Broad-Based in July
by Tom Moeller  August 16, 2022

• Consumer product output led by autos.

• Transit equipment leads business output gain.

• Capacity utilization rebounds following two months of decline.

The factory sector continues to improve, despite weakness in business activity elsewhere in the economy. Industrial production increased 0.6% (3.9% y/y) during July after holding steady in June, revised from a 0.2% decline. A 0.3% increase had been expected in the Action Economics Forecast Survey.

In industry groups, manufacturing production rose 0.7% (3.2% y/y) in July following two consecutive months of decline. Durable goods jumped 1.3% (4.4% y/y) after falling 0.5% in June. Motor vehicle & parts production strengthened 6.6% (13.3% y/y) after falling for two months. Fabricated metals production rose 2.1% (5.3% y/y) but primary metals production weakened 0.9% (-1.9% y/y). Machinery output rose 0.5% (0.7% y/y) but electrical equipment & appliance production fell 1.4% (+2.3% y/y). Computer & electronic product output eased 0.6% (+1.3% y/y). Nondurable goods production inched 0.1% higher last month (1.9% y/y) after a 0.4% decline. Apparel output strengthened 1.6% (6.2% y/y) and chemical output rose 0.5% (2.0% y/y). These gains were offset by a 0.9% drop (-0.2% y/y) in petroleum & coal production as well as a 0.1% easing (+1.9% y/y) in food & beverage output. Utilities output fell 0.8% (+2.2% y/y). In contrast, mining activity rose 0.7% (7.9% y/y).

In market groups, consumer goods output increased 0.6% (2.4% y/y) in July following two months of decline. Construction supplies rose 0.9% (5.0% y/y) while business equipment gained 0.6% (5.1% y/y). Transit equipment production rose 3.2% (9.2% y/y). Materials production rose 0.5% (3.9% y/y).

In the special classifications, factory output of selected high-tech industries improved 0.4% (8.9% y/y) in July after rising sharply in the prior two months. Factory production excluding selected high-tech industries rose 0.8% (3.1% y/y) after two successive 0.5% declines. Manufacturing production excluding both selected high-tech and motor vehicles & parts rose 0.3% (2.3% y/y) after falling for two straight months.

Capacity utilization improved to 80.3% in July, up from 78.7% at the end of last year. An 80.1% rate had been expected. Manufacturing capacity utilization rose to 79.8%, a three-month high and up from 78.6% in December.

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.

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