US Industrial Output Growth Weaker than Expected

US industrial output edged up 0.1 percent month-over-month in July 2018, following an upwardly revised 1 percent increase in June and missing market expectations of a 0.3 percent gain. Manufacturing production continued to grow while there was a contraction in both utilities and mining output.

Manufacturing production moved up 0.3 percent in July, following an increase of 0.8 percent in the previous month. Durable manufacturing rose 0.4 percent (vs 1.6 percent in June), due to production of motor vehicles and parts (0.9 percent vs 7.6 percent); machinery (0.6 percent vs 0.7 percent); computer and electronic products (1.3 percent vs 1.1 percent); primary metals (0.6 percent vs -0.8 percent); and electrical equipment, appliances, and components (0.3 percent vs 1.3 percent). On the other hand, production of fabricated metal products was unchanged. In addition, nondurable manufacturing edged up 0.2 percent, after a 0.1 percent gain in June, due to increases in production of petroleum and coal products (0.9 percent vs -0.4 percent) and chemicals (0.4 percent vs 0.3 percent). By contrast, food, beverage, and tobacco products output contracted (-0.3 percent vs 0.1 percent).

Mining output declined 0.3 percent in July after posting five consecutive months of growth, as a further increase in oil and gas extraction was slightly outweighed by decreases in the indexes for other mining and for mining support activities.

The index for utilities fell 0.5 percent in July for its third consecutive monthly decrease, as a drop for electric utilities (-0.9 percent vs -2.3 percent) outweighed a gain for gas utilities (2.2 percent vs 10.6 percent).

Capacity utilization for the industrial sector was unchanged in July at 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.

US Industrial Output Growth Weaker than Expected

Federal Reserve | Joana Ferreira |
8/15/2018 1:34:41 PM