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Factory Output in U.S. Declines on Weaker Auto Production
Factory Output in U.S. Declines on Weaker Auto Production
By Sho Chandra
August 17, 2017, 8:56 AM EDT August 17, 2017, 9:35 AM EDT
A slump in motor vehicle production pushed down U.S. factory output unexpectedly in July, Federal Reserve data showed Thursday.
HIGHLIGHTS OF INDUSTRIAL PRODUCTION (JULY)
• Factory output dropped 0.1% (est. 0.2% gain) after 0.2% gain
• Total industrial production, which also includes mines and utilities, increased 0.2% (est. 0.3% rise) after a 0.4% rise
• Manufacturing output minus motor vehicles rose 0.2%, reflecting a pickup in non-durable goods production
Key Takeaways
Automobile production fell 3.6 percent in July, the fourth decline in the last five months. That reflected a slowdown in sales that were a bright spot for the economy in recent years. While factory production excluding automobiles increased, the data showed some other areas of softness. Output of business equipment and construction materials dropped for the second time in three months.
While manufacturing is projected to continue to grow, an acceleration in the near term would require bigger gains in household demand, business investment and stronger global sales.
The monthly data, which are volatile and often get revised, contrast with other recent reports. While the Institute for Supply Management’s factory index eased in July from the second-highest level since 2011, it showed steady growth in production, orders and employment. The latest Empire State Manufacturing survey for August also posted a strong gain.
The Fed said the data were inadvertently posted early on its website. The report was scheduled for release at 9:15 a.m. in Washington.
By Sho Chandra
August 17, 2017, 8:56 AM EDT August 17, 2017, 9:35 AM EDT
A slump in motor vehicle production pushed down U.S. factory output unexpectedly in July, Federal Reserve data showed Thursday.
HIGHLIGHTS OF INDUSTRIAL PRODUCTION (JULY)
• Factory output dropped 0.1% (est. 0.2% gain) after 0.2% gain
• Total industrial production, which also includes mines and utilities, increased 0.2% (est. 0.3% rise) after a 0.4% rise
• Manufacturing output minus motor vehicles rose 0.2%, reflecting a pickup in non-durable goods production
Key Takeaways
Automobile production fell 3.6 percent in July, the fourth decline in the last five months. That reflected a slowdown in sales that were a bright spot for the economy in recent years. While factory production excluding automobiles increased, the data showed some other areas of softness. Output of business equipment and construction materials dropped for the second time in three months.
While manufacturing is projected to continue to grow, an acceleration in the near term would require bigger gains in household demand, business investment and stronger global sales.
The monthly data, which are volatile and often get revised, contrast with other recent reports. While the Institute for Supply Management’s factory index eased in July from the second-highest level since 2011, it showed steady growth in production, orders and employment. The latest Empire State Manufacturing survey for August also posted a strong gain.
The Fed said the data were inadvertently posted early on its website. The report was scheduled for release at 9:15 a.m. in Washington.
