US Industrial Output Falls Unexpectedly

US industrial output dropped 0.2 percent from a month earlier in July 2019, following a revised 0.2 percent growth in June and missing market forecasts of a 0.1 percent gain.

Manufacturing output declined 0.4 percent in July, with durables, nondurables, and other manufacturing (publishing and logging) all posting decreases. Production fell for most major durable goods categories. The largest declines were recorded by wood products, machinery, and nonmetallic mineral products, while the only sizable gain was registered by aerospace and miscellaneous transportation equipment. Paper products posted the only increase among nondurables; the indexes for textile and product mills, for printing and support, and for plastics and rubber products each fell 1.0 percent or more.

The index for mining declined 1.8 percent, as Hurricane Barry caused a sharp but temporary decline in oil extraction in the Gulf of Mexico. Still, the index was 5.5 percent above its year-earlier level.

The output of utilities rose 3.1 percent in July after having fallen a similar amount in June.

Capacity utilization for the industrial sector decreased 0.3 percentage point in July to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2018) average. Capacity utilization for manufacturing declined 0.4 percentage point in July to 75.4 percent, a rate that is 2.9 percentage points lower than its long-run average. The operating rate for durable manufacturing declined 0.3 percentage point, and the rate for nondurable manufacturing decreased 0.5 percentage point. The utilization rate for mining fell to 89.2 percent, which is about 2 percentage points above its long-run average. The rate for utilities increased 2.1 percentage points but remained well below its long-run average.

US Industrial Output Falls Unexpectedly

Federal Reserve | Joana Ferreira |
8/15/2019 1:21:39 PM