June Industrial Production Highlights
The Federal Reserve released its report today on Industrial Production in June, here are some highlights:
1. Overall industrial output increased by 0.4%% in June on a monthly basis, and by 4.7% on an annual basis, marking the 29th consecutive month of annual growth.
2. Annual increases were especially strong in June for business equipment (12.8%), motor vehicles and parts (26.3%), oil and gas well drilling (8.7%), and overall manufacturing (5.6%), especially for durable manufactured goods (9.7%).
3. The Federal Reserve reported motor vehicle assemblies of 10.55 million units in June (seasonally adjusted, annual rate), which was an increase of 31% over last year (see top chart above). Coming in at just slightly below April's assemblies of 10.67 million units, it was the second highest monthly number of vehicles assembled since the pre-recession summer of 2007, almost five years ago. Look for strong gains in vehicle sales to continue through the summer, and an ongoing rebound in Midwest manufacturing.
4. The 12.8% increase in June business equipment output brought production of that market group to an index level of 104.4, matching its previous pre-recession peak in February 2008 (see bottom chart above). The transit component of the business equipment group registered the strongest annual gain at 23%.
MP: Overall, today's report suggests that America's industrial sector continues to grow, even though the pace of growth is slowing somewhat. But nothing in today's report on industrial output would suggest that the U.S. economy has entered a new recession, especially when you consider the recovery and ongoing increases in auto assemblies and business equipment since 2009.