Good news for manufacturing was in conspicuously short supply in the Federal Reserve’s report this morning on February production for the sector. Inflation-adjusted output fell for the third straight month, and a continuing technical recession in the once red-hot automotive sector helped drag the entire durable goods sector into the same predicament. As a result, since the onset of the Great Recession, manufacturing has grown in real terms by only 2.25 percent.
Here are the manufacturing highlights of the Federal Reserve’s new release on February industrial production:
>Inflation-adjusted American manufacturing production fell by 0.24 percent in February over January’s levels – which were revised downward from a 0.18 percent monthly gain to a 0.27 percent drop.
>Because of the new February Fed figure and previous revisions, real U.S. manufacturing production is now down for three straight months, and by a cumulative 0.62 percent since November.
>In addition to the new lower January number, the Federal Reserve also revised December’s 0.06 percent gain up to 0.12 percent, November’s 1.26 percent jump to 1.27 percent, October’s 0.10 percent advance to 0.12 percent, and September’s 0.30 percent gain to 0.28 percent.
>Manufacturing’s February monthly production decline was again led by the automotive sector, which for years had led industry’s recovery from a painful recession. Combined vehicles and parts output fell after inflation by a full three percent in February from January’s levels. These in turn were revised down from a 0.55 percent drop to a 0.61 percent decrease.
>The February production drop was automotive’s largest since August, and prolonged the technical recession in which the sector has been mired since July. During this period, real automotive production is down by 8.56 percent.
>Automotive’s problems helped durable goods production to fall for its third straight month in February – by 0.65 percent. As a result, this segment of American industry entered its own technical recession, with output after inflation down 0.37 percent on a cumulative basis since July.
>The new February figures mean that inflation-adjusted overall U.S. manufacturing output is only 2.25 percent higher than it was when the Great Recession in December, 2007 – more than seven years ago.
>Non-durable goods production, long a manufacturing laggard, rose by 0.23 percent in February, following a January monthly decrease of 0.35 percent that was revised down from 0.04 percent.
>The poor February numbers pushed manufacturing’s year-on-year gains down from 5.34 percent in January to 3.71 percent. The big January improvement had benefited from the winter-aided decline the sector suffered last year. Nonetheless, the latest February year-on-year gain exceeded the 2.34 percent increase registered for 2013-14 and the 3.08 percent rise for 2012-13..
>Including the February data, durable goods output is now 9.05 percent greater in inflation-adjusted terms than at the December, 2007 start of the last recession.
>Real non-durable goods production is now 5.68 percent less after inflation than at its pre-recession peak, which was hit in July, 2007.