Business travel prevented me from filing my usual same-day report, but yesterday morning, the Federal Reserve reported that inflation-adjusted American manufacturing production in April barely posted its second straight monthly increase. The sluggish pace of growth and mixed revisions, however, left industry’s real output levels still below those of last November, and its 2015 growth rate paltry. Arguably just as important, the durable goods sub-sector – which represents more than half of domestic manufacturing – entered a technical recession (six months or more of cumulative real output decline), and several industries within durable goods extended their slumps.
Here are the manufacturing highlights of the Federal Reserve’s new release on April industrial production:
>According to the Fed, constant dollar manufacturing production in April topped March’s level by just 0.01 percent. March’s real manufacturing output growth was revised up from 0.13 percent to 0.29 percent, but February’s initially revised 0.22 decrease was revised down to a 0.24 percent drop.
>As a result, after-inflation manufacturing output is 0.54 percent smaller than last November. Moreover, since January, this production has advanced by only 0.05 percent.
>The April Fed figures also show that durable goods manufacturing entered a technical recession (with real production down cumulatively by 0.32 percent since October), and such downturns grew longer in several critical durable goods sub-sectors. In particular,
>although inflation-adjusted automotive output rose by a healthy 1.30 percent on month in April, its production is still 4.22 percent lower than in July, 2014;
>thanks to a 0.85 percent monthly decrease in real output in April, machinery production is now down 0.52 percent since last August;
>a statistically insignificant monthly rise in April fabricated metals production after inflation left its real output 0.06 percent lower than its July, 2014 level; and
>real primary metals production rose by 0.54 percent in April following three straight monthly declines, but its inflation-adjusted output is down 1.42 percent since September, 2011. Indeed, since hitting its recovery peak last July, primary metals output has fallen 10.73 percent in inflation-adjusted terms – due in large measure to a flood dumped foreign steel.
>April’s poor monthly manufacturing performance also resulted in the sector’s worst year-on-year gain of 2015 in real terms. Since recording 5.14 percent annual growth in January, manufacturing’s annual real production increase has declined each month, and stood at 2.56 percent in April.
>The April year-on-year inflation-adjusted manufacturing production rise was also lower than that for April, 2013 to April, 2014 (3.68 percent), though it was higher than 2012-2013’s 2.44 percent.
>Durable goods production inched up by 0.11 percent on month in April, but year-on-year growth in this enormous group of industries has slowed dramatically, too – from 6.06 percent in January to 2.58 percent in April. Indeed, this latest annual rise was manufacturing’s worst April-April performance of the six-plus year-old economic recovery.
>Non-durable goods output shrank on month in April in real terms by 0.09 percent. Its year-on-year real output increases have slowed steadily this year as well – from 4.09 percent in January to 2.51 percent last month. But this April’s annual increase did beat 2013-14’s 2.38 percent.
>April’s figures leave real manufacturing production 2.34 percent higher than at the start of the last recession, in December, 2007.
>Durable goods output after inflation is 8.73 percent higher during this seven-plus year period, while non-durable goods production in constant dollars is 5.19 percent lower.