The Federal Reserve’s new industrial production data showed that American domestic manufacturing’s broad-based recession continued into June despite the best automotive performance since last July. Overall real factory output is down on net since November, 2014. Durable goods inflation-adjusted output is still fractionally lower than its level that July. Non-durable goods constant dollar production is down since April, 2015. Year-on-year figures overall looked better, but manufacturing output’s new volatility has muddied their message.
The new data for the entire factory sector plus mixed revisions helped keep overall manufacturing output 4.22 percent below the level it hit when the last recession began more than eight years ago. That is, the manufacturing slump triggered by the Great Recession still hasn’t ended.
Here are the manufacturing highlights of the Federal Reserve’s new release on June industrial production:
>The biggest monthly automotive real production increase since last July was not enough to pull American domestic manufacturing out of an output downturn that has now lasted nearly two years, with the sector’s cumulative production down 0.33 percent after inflation since November, 2014.
>Manufacturing’s technical recession still encompasses both its durable goods and non-durable goods super-sectors.
>In constant dollar terms, durable goods production remains 0.08 percent lower than their July, 2014 level. Non-durable goods monthly output is off by 0.05 percent since April, 2015.
>Overall price-adjusted manufacturing output grew on month by 0.47 percent in June, its best such performance since last July’s 0.68 percent increase.
>Revisions were mixed. May’s initially reported 0.39 percent monthly drop was upgraded to a 0.27 percent decline. April’s already lowered 0.22 percent real production rise was cut further to a negligible 0.08 percent. March’s downwardly revised 0.39 percent falloff was fractionally improved to a 0.37 percent decrease. And February’s after-inflation production dip is now judged to be 0.06 percent, not 0.03 percent.
>June’s 5.93 percent sequential real production increase for the automotive sector was not only its best such advance since last July’s 7.27 percent. It also pulled automotive out its own technical recession.
>At the same time, the initially reported May month-to-month constant dollar output decrease of 4.16 percent – its worst such figure since winter-affected January, 2014’s 6.47 percent – was revised down to a 4.33 percent decrease.
>Year-on-year real output in manufacturing overall rose by 0.64 percent in June – its biggest such improvement since February’s 0.96 percent. The modest June annual after-inflation increase actually beat that for the previous June-June period (0.59 percent). But it was better than May’s 0.14 percent yearly decline – which was revised down from a bare 0.01 percent rise.
>The June overall manufacturing figures along with the mixed revisions left the sector’s overall output 4.22 percent below its levels when the last recession officially began – more than eight years ago, in December, 2007. That is, by this measure, the Great Recession has still not ended for domestic manufacturing.
>The June on-month automotive pop was led by 9.04 percent jump in price-adjusted vehicle production – the biggest monthly increase since last July’s 9.38 percent. In addition, May’s initially reported 7.25 percent real production swoon – the worst since winter-affected January, 2014’s (10.41 percent) was revised up to a 6.77 percent drop-off.
>Motor vehicle parts production rebounded in real terms, too – but by a smaller 3.90 percent over May’s level. That figure, too, however, was its best since last July’s 7.85 percent. Yet the May monthly downturn was revised from 1.94 percent to 2.26 percent.
>Year-on-year, combined vehicle and parts output rose 7.77 percent in June – their fastest annual growth since February’s 10.04 percent. The June yearly increase also easily bested the 3.15 percent figure for the previous two Junes.
>The annual gains, however, were led by parts, whose real output increase of 9.30 percent exceeded the 6.03 percent advance for vehicles.
>Automotive’s performance keyed durable goods 0.87 percent monthly inflation-adjusted output rise in June. That rise was its biggest since May, 2014. Moreover, May’s initially reported 0.69 percent monthly real output decrease for durable goods was upgraded to a 0.51 percent fall.
>Durable goods’ yearly real production advance was pegged at 0.71 percent in June – the best since February’s 0.85 percent. Moreover, the previous such June-June results revealed a 0.07 percent annual decline, underscoring recent volatility.
>The non-durable goods super-sector, however, lost momentum in June, with real output decreasing 0.05 percent over May’s level. The May figure was revised from a 0.02 percent dip to a 0.03 percent increase. But April’s monthly results, originally recorded as a gain, were revised down once more to a sizable 0.54 percent loss.
>Non-durable goods’ real output was up annually in June by 0.51 percent. This increase topped May’s downwardly revised 0.24 percent, but was much weaker than the 1.40 percent inflation-adjusted growth achieved between June, 2014 and June, 2015.
>Since its pre-recession peak, in July, 2007, real output of non-durable goods is now down 10.55 percent.