The Federal Reserve’s new industrial production data showed that a rise in automotive industry output in July to a new monthly record helped lift the overall manufacturing sector out of its latest technical recession. The all-time high in combined vehicles and parts production after inflation – its second straight – also ended a downturn in the durable goods super-sector. Motor vehicle parts production set its second straight new monthly record in July as well.
Manufacturing’s overall sequential real output increase of 0.55 percent was its best such performance in a year, and revisions were mildly positive. Nonetheless, America’s after-inflation manufacturing production is still 3.78 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 July industrial production:
>A record month for inflation-adjusted automotive production helped fuel a 0.55 percent monthly rise in real U.S. manufacturing output in June and end a recession in industry overall and in the durable goods super-sector.
>Real output of vehicles and parts combined in July rose by 1.91 percent sequentially and eclipsed the June’s old record total.
>Auto parts production led the way, with its 2.30 percent sequential real growth in July resulting in a second straight monthly record as well.
>Vehicles production was up 1.76 percent in constant dollar terms over June’s level.
>This strong automotive sector performance ended a technical manufacturing recession that had begun in November, 2014, and a durable goods downturn that had dated from last July.
>Overall manufacturing’s 0.55 percent monthly real production increase in July was its best such total since last July’s 0.68 percent increase.
>Revisions were slightly positive. June’s previously reported 0.47 percent real sequential output advance was revised down to 0.32 percent. But May’s upwardly revised 0.27 percent monthly inflation-adjusted production decline was upgraded again – to a 0.21 percent drop. And April’s downgraded 0.08 percent real production increase was revised up to 0.11 percent.
>Year-on-year real output in manufacturing overall rose by 0.42 percent in July – lower than the 0.85 percent after-inflation annual improvement logged between July, 2014 and July, 2015.
>In addition, June’s previously reported 0.64 percent real annual output rise was is now pegged at only 0.55 percent, but May’s 0.14 percent annual decrease was revised to a 0.03 percent increase.
>The July overall manufacturing figures along with the mixed revisions left the sector’s overall output 3.78 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.
>Thanks largely to the automotive sector, durable goods production rose month-on-month by 0.63 percent in July after inflation. June’s initially reported 0.87 percent advance was revised down to 0.85 percent, but May’s upgraded 0.51 percent sequential real production drop was upgraded to a 0.47 percent decrease.
>Durable goods’ yearly real production advanced by 0.57 percent in July – off slightly from June growth that was upgraded from 0.71 percent to 0.73 percent. But the latest annual July durable goods numbers improved on the preceding July-to-July performance, which slipped fractionally.
>Real durable goods production is now up 1.76 percent since its pre-recession peak at the end of 2007.
>The non-durable goods super-sector, however, remained in technical recession, even though inflation-adjusted output increased by 0.45 percent on a monthly basis. Real production is down on net since last October.
>Part of the reason was a June constant dollar monthly production decrease that was revised from 0.05 percent to 0.33 percent. May’s sequential growth performance was upgraded from 0.03 percent to 0.10 percent.
>Non-durable goods’ real output was up annually in July by only 0.21 percent. Moreover, the previously reported June figure was downgraded from 0.51 percent to 0.32 percent, although May’s 0.24 percent increase is now pegged at 0.31 percent.
>Since its pre-recession peak, in July, 2007, real output of non-durable goods is now down 10.33 percent.