Manufacturing Strong In July
8/15/2014
Once per month, the Federal Reserve releases a measurement of industrial production and capacity utilization rates covering manufacturing, mining, and electric and gas utilities. The report notes that industrial production increased by a robust 0.4% in July, and equaled the revised pace set in June (originally up 0.2%), and were slightly higher than consensus’ expectation of 0.3%. The most notable component was in manufacturing, which surged a whopping 1.0% in July after just a 0.3% increase in June; analysts were only looking for a 0.5% increase. Mining activity slowed a bit, increasing by 0.3% in July after jumping 1.3% in June. Within manufacturing, the production of durable goods increased 1.7% in July; this is 8.2% higher than a year ago. Capacity utilization, which measures the potential for sustainable output, was up to 79.2% in July from 79.1% in June and in-line with analysts’ expectations. Overall, this shows that the industrial sector may not be as bad in the US as some originally believed.
Jennifer Coombs
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