Sorry for the delay, but the new Federal Reserve production figures that came out yesterday contain news definitely worth reporting. They showed that constant-dollar manufacturing output increased by 0.23 percent sequentially in October – enough to lift the sector (barely) out of a technical recession that had seen its production shrink in cumulative terms for nearly two years.
Yet even 0.38 percent monthly real growth couldn’t end the downturn in the durable goods super-sector, which represents most manufacturing production. Revisions for manufacturing overall were minor but negative. And despite this second straight month of sequential growth for industry, its inflation-adjusted output remained 4.17 percent below the level it hit when the Great Recession began at the end of 2007 – nearly nine years ago.
Here are the manufacturing highlights of the Federal Reserve’s new release on October industrial production:
>Inflation-adjusted manufacturing output in October rose by 0.23 percent on month – its second straight increase and an advance strong enough to (barely) pull industry out of a technical recession that had begun in November, 2014.
>Since that month, real manufacturing production is now up – but by just 0.03 percent.
>Yet durable goods industries remained in a technical slump despite growing by 0.38 percent sequentially in real terms in October. Price-adjusted output in this sector (manufacturing’s largest) is still below that of November, 2014 – albeit by a meager 0.04 percent.
>Further, despite the end of that last overall manufacturing recession, industry’s constant-dollar output remains 4.17 percent below that achieved in December, 2007 – when the Great Recession broke out.
>Manufacturing production revisions were mixed. September’s originally reported real monthly output increase of 0.23 percent was downgraded to 0.20 percent and August’s downwardly revised 0.52 percent drop is now judged to have been a 0.54 percent decrease
>Year-on-year, manufacturing’s after-inflation production inched up by only 0.04 percent in October. The comparable figure for the previous Octobers was 0.92 percent.
>Durable goods’ year-on-year real production increase was 0.65 percent in October. That actually bested its performance between October, 2014 and October, 2015 – when the super-sector’s inflation-adjusted output rose just 0.10 percent.
>During the nearly nine years since the Great Recession’s December, 2007 onset, real durable goods production has advanced by 1.60 percent.
>In October, real production grew sequentially in the non-durable goods super-sector of manufacturing – but by a mere 0.05 percent.
>Year-on-year, however, its constant-dollar output was off by 0.70 percent in October. Between October, 2014 and October, 2015, real non-durable goods output rose by 1.90 percent.
>Since its pre-recession after-inflation production peak, in July, 2007, real production in non-durable goods has shrunk by 10.96 percent.