The decline reflected a broad industrial deceleration, led by a contraction in consumer durable goods.
U.S. industrial production fell for a second straight month in June, according to the Federal Reserve. The decline reflected a broad industrial deceleration, led by a contraction in consumer durable goods.
The Federal Reserve data showed that June overall industrial production fell by 0.5% from May and was down 0.4% year-over-year. It marked the index’s first year-over-year decline since February 2021. The April-to-May decline was likewise 0.5%. The past two months follow month-to-month gains in March (0.1%) and April (0.6%).
Within the Fed’s Industrial Production Index, its readings for Manufacturing fell 0.3% month-to-month in June (-0.2% in May) and was down 0.3% year-over-year. Its mining index fell 0.2% month-to-month in June (-1.4% in May) and was up 2.8% year-over-year. The Fed’s Utilities index fell 2.6% month-to-month in June (-1.5% in May) and was down 6.2% year-over-year.
For the major market groups the industrial production index covers:
- Consumer Goods output fell 1.3% month-to-month in June (-0.5% in May) — its biggest one-month drop since February 2021 — and was down 0.7% year-over-year
- Business Equipment output was flat in June month-to-month (-0.4% in May) and was down 0.2% year-over-year
- Construction output was up 0.3% month-to-month (+0.2% in May) and was down 1.1% year-over-year
- Materials output was down 0.4% month-to-month (-0.6% in May) and was flat year-over-year
The Fed’s capacity utilization measure — a guage of potential factory output being used — fell to a three-month low of 78% in June, while the overall industrial utilization rate declined to 78.9%.
source: tradingeconomics.com
Read more about the Fed’s data for June industrial production here.
The past two months of factory output decline coincide with the down-trending manufacturing purchasing managers index (PMI) from the Institute for Supply Management, which showed a June reading of 46.0% — down another 0.9 percentage points from May and the lowest since May 2020’s 43.1%. Any PMI reading below 50.0% indicates industrial economic contraction.
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Mike Hockett is MDM’s executive editor, having joined the publication in March 2022. He oversees MDM’s editorial content and direction, coordinates with contributing authors, conducts interviews with executives in the wholesale distribution space and serves as the editorial face of MDM at industry events. He has extensively covered the distribution and manufacturing sectors since 2014. Hockett earned a degree in print journalism from the University of Wisconsin-Eau Claire and works from his home in Madison, Wisconsin. He can be contacted at mike@mdm.com.
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