• 6 hours Can The British Pound Overcome Brexit?
  • 12 hours Is A Gold Breakout Near?
  • 1 day Federal Reserve Downgrades U.S. Growth And Cuts Rate Hikes
  • 1 day Disney Beats Out Comcast In $71.3B Mega-Merger
  • 2 days The Feds Continue To Prop Up Equities Markets
  • 2 days Bejing's Sway In South China Sea Is Fading
  • 2 days Saudis Eye Billions As Stocks Get Emerging Market Boost
  • 2 days Airbnb In Acquisition Mode Ahead Of IPO
  • 3 days Gold Hangs At $1,300 Ahead Of Fed Meeting
  • 3 days Champagne Sales Slow As European Economic Worries Grow Louder
  • 3 days Putin Signs “Digital Iron Curtain” Into Law
  • 3 days Russian Metals Magnate Sues U.S. Over Sanctions
  • 4 days Tesla Looks To Jump Into Indian Market
  • 4 days Global Banks Lay Groundwork To Re-Inflate Asset Prices
  • 4 days Homeowners Experiment With Risky New Investment Trend
  • 4 days U.S. Tech Stocks Look Increasingly Vulnerable
  • 5 days De Beers To Expand World’s Most Profitable Diamond Mine
  • 5 days Ford CEO Gets Raise After Massive Layoff Round
  • 5 days Germany’s Flirtation With Recession Could Cripple The Global Economy
  • 6 days Where To Look As Gold Miners Inch Higher
Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

The Chatroom Cartel Running Global Bond Markets

The Chatroom Cartel Running Global Bond Markets

Eight major banks have been…

  1. Home
  2. Markets
  3. Other

Industrial Production Jumps 0.6%; Has Manufacturing Turned?

Industrial production jumped 0.6% in June vs. an Econoday consensus of +0.4%. Is this a turn or just more volatility?

Vehicles held down industrial production in May but not in June, making for a big 0.6 percent gain that is just outside Econoday's high-end estimate. The production of motor vehicles & parts surged 5.9 percent in June following a 4.3 percent drop in May. Year-on-year, this component tops the list with 7.8 percent growth compared to only 0.4 percent growth for manufacturing as a whole. Only due to vehicles, manufacturing managed to put in a good showing in June, up 0.4 percent on the month to reverse a revised 0.3 percent decline in May.

Headline production also got a big boost from utilities where output rose 2.4 percent in the month. Mining output, which is down 10.5 percent year-on-year, posted a second straight small gain, at plus 0.2 percent which is promising and follows the recovery in energy and commodity prices.

Looking at details deeper in the report, the output of business equipment rose a solid 0.7 percent but the year-on-year rate, in what is definitive evidence of weakness in business investment, is in the negative column at minus 0.6 percent. The output of consumer goods, up 1.6 percent on the year, rose 1.1 percent in the month in what is another good showing in this report.

The second quarter had been looking soft before this report and especially this morning's retail sales report. A June bounce in the factory sector, facing global weakness and unfavorable currency appreciation, may not extend much into the third quarter but it may make a difference in the final readings of the second quarter.


Industrial Production and Capacity Utilization

Let's tune into the Fed G.17 report on Industrial Production and Capacity Utilization for more details and a chart.


Industrial Production and Capacity Utilization: 2016 Summary

Industrial Production and Capacity Utilization: 2016 Summary
Larger Image

February, March, and May were negative. January, April, and June were up. Volatility in this series is the norm. April was revised slightly lower and May slightly higher. Average it all out and things do not look so great. Year-over-year numbers are -0.7%.


Industrial Production 1968-Present

Industrial Production 1968-Present


Has Manufacturing Turned?

Part of this month's bounce was a rebound in autos. Another part was utilities.

Here's a key line from the report "The output of manufactured goods other than motor vehicles and parts was unchanged. The index for utilities rose 2.4 percent as a result of warmer weather than is typical for June boosting demand for air conditioning."

 

Back to homepage

Leave a comment

Leave a comment