U.S. Industrial Production Shows Momentum with Strong June

U.S. industrial production increased in June following a 0.9% rise in May.

The Federal Reserve’s latest Industrial Production and Capacity Utilization Report showed that production increased 0.6% in June month-to-month, surpassing the market expectations of a 0.3% gain from economists surveyed by the Wall Street Journal.

At 104% of its 2017 average, total industrial production in June was up 1.6% year-over-year. Capacity utilization climbed to 78.8%, which was down 0.9 percentage points year-over-year.

Year-over-year, total industrial production likewise increased 1.6%, assisted by a 1.1% rise in manufacturing and utilities 7.9%, while mining decreased 0.6%.

U.S. Industrial Production Index – Month-to-Month

source: tradingeconomics.com

Market Groups

Most major market groups saw gains in June. The index for consumer goods increased by 1% month-to-month, driven by a 2.7% increase in automotive products. The index for materials saw a modest increase of 0.7%, benefiting from gains in energy and non-energy components.

Defense and space equipment also showed positive growth with a 0.7% rise. However, business equipment and construction supplies were the only major market groups to experience declines, with respective decreases of 0.4% and 0.1%.

Industry Groups

Manufacturing output edged up 0.4% in June month-to-month, standing 1.1% above its year-earlier level. Nondurable manufacturing saw a 0.8% monthly rise, while durable manufacturing posted a 0.9% increase.

Specific industries such as motor vehicles and parts (+1.3%) and miscellaneous manufacturing (+1.7) contributed to gains in June. Mining output increased by 0.3% month-to-month, and utilities output rose by 2.6%.

Capacity utilization for manufacturing increased by 0.3 percentage points to 77.9%, reflecting an upward trend across various manufacturing segments.