Industrial production fell 0.6% in July after increasing 0.3% in June according to the Federal Reserve. The indexes for mining remained flat while utilities decreased 3.7%. Total industrial production in June was 0.2% below its year-earlier level at 102.9% of its 2017 average. Capacity utilization moved down to 77.8% in July, a rate that is 1.9 pp (percentage points) below its long run (1972-2023) average.
Most major market groups posted losses in July. The index for consumer goods declined 1% largely because of a 7% drop in the index for automotive products. The index for materials fell 0.7%, recording losses in both its energy and its non-energy components. Business equipment was little changed for the month of July. A 4.6% drop in the index for transit was largely offset by increases in the output of industrial and other equipment and of information processing equipment.
Manufacturing output edged down 0.3% in July and was 0.1% above its year-earlier level. Hurricane Beryl is estimated to have held down July manufacturing output by 0.3%. The index for durable manufacturing fell 0.9% while the index for nondurable manufacturing rose 0.4%. The index for other manufacturing (publishing and logging) declined 1.6%. Within durables, the drop in the index for motor vehicles and parts of 7.8% more than offset gains elsewhere, including computer and electronic products (1.5%), machinery (1.4%), and primary metals (1.3%). Within nondurables, the largest gains were recorded in the indexes for petroleum and coal products (1.7%) and paper (1.3%).
Mining output was flat in July. Temporary facility closures due to Hurricane Beryl reduced the output of natural gas liquid extraction. The output of utilities dropped 3.7% in July, led by a 4.3% decline in electric utilities.
Capacity utilization for manufacturing moved down in July to 77.2%, a rate that is 1.1 pp below its long-run average. The operating rate for mining was unchanged at 88.8% in July; 2.3 pp above its long-run average. On the other hand, the operating rate for utilities decreased to 71.0% in July.
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