A boost in automotive parts manufacturing, as well as an increase in the output of defense and space equipment, contributed to an uptick in U.S. industrial production during the month of July, according to the U.S. Federal Reserve. This marks an improvement—albeit a modest one—over both May and June, which saw increases of only 0.1 percent.
Following are some highlights from the July U.S. industrial production report:
The production of consumer goods increased 0.6 percent in July after having decreased 0.4 percent in June. The output of durable consumer goods advanced 1.5 percent in July. Within durable consumer goods, the production of automotive products increased 1.9 percent and was 15.5 percent above its year-earlier level.
Likewise, the output of defense and space equipment rose 2.8 percent in July, as workers returned from a labor strike at a major military aircraft manufacturing facility. The gain nearly reversed the declines in the previous three months; the level of the index in July was 5.2 percent above its year-earlier level.
On the downside, the output of home electronics moved down for a fifth consecutive month and was 5.2 percent lower than its year-earlier level. Similarly, the output of business equipment declined 0.1 percent in July after having jumped nearly 2 percent in June. In July, a drop of 1.9 percent in the index for industrial and other equipment outweighed substantial gains in transit equipment and in information processing equipment. Over the past 12 months, the overall index for business equipment has advanced 12.3 percent, with sizable gains in all three of its major categories.
The output of materials to be processed further in the industrial sector rose 1.0 percent in July after having increased 0.2 percent in June. The output of durable materials advanced 1.1 percent in July, with a jump of 4.2 percent in consumer parts and smaller improvements in its other major components. The production of nondurable materials increased 0.4 percent. Although the output of textile materials decreased 1.5 percent, all of the other major nondurable materials categories recorded gains. The index for energy materials strengthened 1.2 percent, supported by gains for natural gas and crude oil extraction, coal mining, and electricity generation.
Manufacturing output increased 0.5 percent in July—5 percent above its year-earlier level. The factory operating rate moved up 0.2 percentage points in July to 77.8 percent, a level 1.0 percentage point below its long-run average.
The production index for durable goods increased 0.8 percent in July, with gains of more than 1 percent recorded in primary metals, in computer and electronic products, in motor vehicles and parts, in aerospace and miscellaneous transportation equipment, and in miscellaneous manufacturing. Only wood products, nonmetallic mineral products, and machinery posted decreases. Capacity utilization for durable goods manufacturing was 78.6 percent, a rate 5.1 percentage points above its year-earlier level and 1.5 percentage points above its long-run average.
In July, the production of nondurables was unchanged. Increases in the production indexes for food, for paper, and for plastics and rubber products offset losses in most other categories of nondurables. The overall output of nondurables has edged up 0.5 percent in the past 12 months. Capacity utilization was unchanged in July at 78.2 percent; it remained 2.7 percentage points below its long-run average.
Mining output advanced 1.2 percent, with gains in oil and gas extraction, coal mining, and metal mining. Capacity utilization for mining moved up 0.9 percentage point to 90.4 percent, a rate 3.1 percentage points above its long-run average. The output of utilities increased 1.3 percent after having fallen 3.3 percent in June. The operating rate for utilities rose 0.8 percentage point in July to 75.7 percent, a rate 10.6 percentage points below its long-run average.
The full U.S. industrial production report for July is available online.