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The new January industrial production figures from the Federal Reserve showed a slow 2015 start for manufacturing, a slower end of 2014 than first estimated, and an automotive sector that has gone from industry leadership throughout the current recovery to a technical recession.  

Here are the manufacturing highlights of the Federal Reserve’s January industrial production report:

>This morning, the Federal Reserve reported that inflation-adjusted American manufacturing production increased by 0.18 percent in January over December’s levels.

>In addition, the monthly production changes for four of the previous five months were revised down. December’s previously reported 0.29 percent improvement was changed to 0.06 percent, November’s 1.34 percent lowered to 1.26 percent, October’s 0.26 percent to 0.10 percent, and September’s 0.37 percent to 0.30 percent. August’s 0.37 percent decrease was revised upward to a 0.30 percent falloff.

>January’s monthly 0.55 percent decrease in automotive production tipped combined U.S. vehicle and parts output into a technical recession, with output down on net over a six-month period. Once the leader of manufacturing’s recovery from a deep recessionary downturn, the automotive sector has now seen its production drop on month for five of the last six months.

>In fact, since its 9.38 percent real monthly output spike in July, automotive production is off by 5.68 percent.

>January was also a poor month for after-inflation output of non-durable goods, which declined from December levels (by 0.04 percent) for its second month-on-month drop in four months. Previous figures showed non-durables output outpacing durables’ production in recent months.

>Due to its poor recent performance, real overall manufacturing production is up only 3.14 percent since the beginning of the last recession in December, 2007 – more than seven years ago.

>January’s year-on-year manufacturing gains were genreally strong, but much of this improvement stemmed from the 1.03 percent monthly winter-aided decline the sector suffered last year.

>The new revisions depressed the December-to-December increase in real manufacturing output down from 5.22 percent to 4.92 percent. But this gain still represented an impressive improvement over 2012-2013’s 2.47 percent and 2011-2012’s 4.37 percent. Moreover, even once the winter distortions ended, manufacturing’s year-on-year production accelerated over the year.

>Despite the automotive drop, durable goods production advanced by 0.38 percent in January, in contrast to that 0.04 percent decline for nondurables. In December, revised figures show that durable goods production fell by 0.21 percent, rather than growing by 0.20 percent.

>Durable goods output is now 10.42 percent greater in inflation-adjusted terms than at the December, 2007 start of the last recession.

>Real non-durable goods production is now 5.27 percent less after inflation than at its pre-recession peak, which was hit in July, 2007.

 

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