The Federal Reserve this morning released the industrial production figures for June, and they again put the kibosh on claims that American manufacturing is experiencing or verging on an historic renaissance. As shown in the highlights below, they make clear that any momentum gains enjoyed by U.S. manufacturing since its winter slump have just about vanished:
>Inflation-adjusted U.S. manufacturing output rose by 0.11 percent in June. May’s 0.65 percent on-month gain was revised down to 0.48 percent on month, and April’s growth was revised down from 0.34 percent to 0.29 percent.
>These data reveal a dramatic slowdown from the real growth registered by domestic industry since its rebound from a slump earlier this year partly resulting from harsh weather. In February, real manufacturing output jumped by 1.30 percent on month in real terms after falling by 1.03 percent in January. Strong after-inflation manufacturing growth continued in March with a 0.91 percent improvement registered. But subsequent increases have been much slower.
>June also witnessed the first year-on-year slowdown in real manufacturing growth since January. Although strong at 3.63 percent, and much higher than January’s 1.75 percent gain, this June increase was lower than May’s 3.86 percent improvement.
>In addition, real production fell in June on month in the recently booming U.S. automotive sector for the first time since January. Vehicle output rose 0.35 percent in June, but a 1.22 percent fall-off in parts production (the first since January), dragged the entire industry down to a 0.31 percent decrease.
>Nonetheless, the latest June year-on-year total manufacturing figures continued a string of 2014 annual increases that have exceeded their 2013 counterparts. Between June, 2012 and June, 2013, domestic industry’s real output grew by 2.90 percent.
>The June figures pushed inflation-adjusted manufacturing output 0.35 percent above its pre-recession peak, achieved in December, 2007.
>The gap between the fortunes of America’s durable and nondurable goods manufacturers remained substantial in June. Real output in the former increased by 0.44 percent over May, while the latter dropped by 0.26 percent, its second straight monthly decline.
>Year-on-year, real June durable goods production increased by 5.43 percent, better than May’s 4.65 percent and continuing a speed-up that began in February.
>More dramatically, inflation-adjusted durable goods production is now 7.36 percent above its December, 2007 pre-recession peak.
>June real non-durable goods production is up only 1.54 percent year-on-year – lower than May’s 2.11 percent but still much higher than January’s 0.11 percent
>Real nondurable goods output is still 7.76 percent below its July, 2007 pre-recession peak.