Industrial Production Rose 0.9% in July
Industrial Production Rose 0.9% in July After Prior Four Months Were Revised Higher, RJS at MarketWatch 666
The Fed’s G17 release on Industrial production and Capacity Utilization for July indicated industrial production rose by 0.9% in July after rising by a revised 0.2% in June and a revised 0.8% in May, and is now up 6.6% from a year ago . . . the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, rose to 101.1 in July from 100.2 in June, which was revised from the 100.1 reported for June a month ago . . . at the same time, the May reading for the IP index was revised up from 99.7 to 100.0, the April reading for the index was revised up from 99.0 to 99.2, and the March reading for the index was revised up from 98.9 to 99.1 . . .
The manufacturing index, which accounts for around 77% of the total IP index, increased by 1.4% to 99.5 in July, after June’s manufacturing index was revised from 97.9 to 98.2, May’s manufacturing index was revised from 97.9 to 98.5, the April manufacturing index was revised from 97.1 to 97.4, the March manufacturing index was revised from 97.5 to 97.7, and the February manufacturing index was revised from 94.5 to 94.6, and hence the manufacturing index is now up 7.4% from a year ago . . . the July manufacturing increase was largely due to a seasonally adjusted 11.2% increase in the output of motor vehicles and parts, as a number of vehicle manufacturers canceled their normal July shutdowns after vehicle assemblies had been constrained by a persistent shortage of semiconductors over the prior months; without the large July seasonal adjustment, actual vehicle assemblies fell by more than 20% . . . meanwhile, the mining index, which includes oil and gas well drilling, rose 1.2%, from 107.2 in June to 108.4 in July, after the June index was revised down from 108.2, which still left mining 12.1% higher than it was a year ago, . . . finally, the utility index, which often fluctuates due to above or below normal temperatures, fell 2.1% to 101.2 in July, after the June utility index was revised from 103.6 to 103.3 and the May index was revised from 100.9 to 100.3 . . . with a hotter July in 2020, the utility index is now 3.8% below its year ago reading of 105.3.
This report also provides capacity utilization figures, which are expressed as the percentage of our plant and equipment in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry rose from 75.4% in June to 76.1% in July, after capacity utilization for June was unrevised at 75.4%, but after capacity utilization for May was revised from 75.1% to 75.3%…capacity utilization by NAICS durable goods production facilities rose from 74.0% in June to 75.8% in July, while capacity utilization for non-durables producers rose from 77.8% to 78.0% at the same time . . . meanwhile, capacity utilization for the mining sector rose to 76.9% in July from 75.9% in June, which was originally reported as 76.7%, while utilities were operating at 72.6% of capacity during July, down from their 74.3% of capacity during June, a figure that was originally reported at 74.5% . . . for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories . . .
i should clarify how i estimated that actual vehicle assemblies fell by more than 20%, as the Fed doesn’t give an unadjusted figure for July…i checked the seasonal adjustment factors for last year, and found that actual vehicle assemblies fell by 29.5 points from June to July, while July 2020 seasonally adjusted production was up 3.5%…from that i judged that last years seasonal adjustment factor was about +33%, and since July this year shows a seasonally adjusted 11.2% increase, i figured actual assemblies to be down more than 20%…i also expect we’ll give at least part of that +11.2% back in August as the seasonal adjustment reverses..
caveats: while seasonal adjustment factors are revised once a year, they’re usually not revised by much, and that’s the first time i’ve tried making such an estimate on this data, so i don’t know how it will play out…sometimes i don’t discover a mistake i’ve made til it lands on me..