Industrial production up 0.4% in August, USA
Industrial production increased by 0.4% and manufacturing by 0.7% in the USA in August, compared to no change and a fall of 0.4% respectively in July.
The data comes from a new report ”Industrial Production and Capacity Utilization – G.17” by the Board of Governors of the Federal Reserve System.
Although industrial production increased in August 2013 by 2.7% compared to August 2013, it is only at 99.4% of its 2007 average – before the Great Recession hit.
Capacity utilization for the industrial sector rose by one-fifth of a percentage point in August to 77.8%, that is a 0.6% percentage point higher than August 2012 and 2.4% percentage points less than its long run (1972-2012) average.
Industrial production changes according to market groups
After decreasing by 0.5% in July, the production of consumer goods rose 0.3% in August, 2.3% higher than the previous year.
Durable goods production increased by 2.5% in August, reversing a decline in July. This was mainly driven by a rebound in automotive products.
While the production of home electronics, carpeting and furniture increased in August, miscellaneous goods remained the same, as it had done in July.
Below are some highlighted data from the report for industrial production in August 2013 compared to July 2013:
- Consumer goods +0.3%.
- Durable goods +2.5%.
- Consumer non-durables -0.3%, the fifth month in a row with no increase.
- Non-energy durables, unchanged.
- Losses for chemical products and paper products were offset by gains in foods, tobacco and clothing.
- Consumer energy products -1.5%, after +1.7% in July. There were decreases in both utilities and fuels in August.
- Business equipment +0.9%, after -0.9% in July
- Transit (transportation) equipment +3.6%
- Information processing equipment +1.2%
- Industrial and other equipment -0.2%
- Defense and space equipment +1.0%, after -0.1% in July
- Construction supplies +0.3%, the third consecutive monthly increase
After falling 0.4% in July, manufacturing output rose by 0.7% in August, 2.6% higher than in August 2012.
US Manufacturing benefiting from stronger global economy
The 17 Eurozone nations saw economic growth during Q2 2013 after six consecutive quarters of recession. The UK and Japan are seeing encouraging rates of growth. China’s manufacturing also grew in August, after shrinking for three consecutive months.
After expanding at an annual rate 2.5% in Q2 2013, the American economy is expected to grow (annual rate) by 2% in the current quarter. Experts believe growth will pick up again during the final quarter of this year.
As the effects of tax increases and government spending cuts fade, economists expect growth may well strengthen further next year.
Tomorrow, Federal Reserve officials start a two-day policy meeting. They are expected to taper the $85 billion in monthly bond buying.