Industrial production fell 0.6 percent in July on top of a negative 0.3 percentage point revision to June. Motor vehicle production was down 7.8 percent.
The Federal Reserve Industrial Production and Capacity Utilization report for July was a disaster.
- Industrial production fell 0.6 percent in July after increasing 0.3 percent in June. Early July shutdowns concentrated in the petrochemical and related industries due to Hurricane Beryl held down the growth of industrial production by an estimated 0.3 percentage point.
- Manufacturing output stepped down 0.3 percent as the index for motor vehicles and parts fell nearly 8 percent;
- Manufacturing excluding motor vehicles and parts rose 0.3 percent. The index for mining moved sideways while the index for utilities decreased 3.7 percent.
- At 102.9 percent of its 2017 average, total industrial production in July was 0.2 percent below its year-earlier level.
- Capacity utilization moved down to 77.8 percent in July, a rate that is 1.9 percentage points below its long-run (1972–2023) average.
The Bloomberg Econoday consensus estimate was a decline of 0.1 percent.
The Fed revised June revised lower by 0.3 percentage points from 0.6 to 0.3 percent making the decline look mote like 0.9 percent.
This was a bad report even accounting for Hurricane Berl.
Industrial Production Since 1999
In December of 2007 industrial production and manufacturing peaked one month before the start of the Great Recession.
Manufacturing has still not made another high.
The recent high in industrial production since the Covid pandemic is 103.55 in June. It would be fitting if that’s the top right as recession hits.
Retail Sales Surge In July from Smaller Negative Revision
Earlier today I commented Retail Sales Surge In July from Smaller Negative Revision
Advance retail sales rose 1.0 percent in July from a negative 0.2 revision led by Motor vehicles autos. I’m skeptical because of how auto sales are counted.
Motor vehicle sales allegedly surged 3.6 percent following a 3.4 percent decline last month.
Motor vehicle sales are counted when shipped from the manufacturer to the dealer no matter how long the cars sit on the lots. This grossly distorts auto sales.
I expect major negative revisions to the retail sales report.