New Federal Reserve data showed that inflation-adjusted U.S. manufacturing production rose sequentially by 0.17 percent in December, an improvement that put industry back above its November, 2014 output level (by 0.09 percent) and therefore ended its latest technical recession. Downward revisions for October and November had pushed the factory sector back into a downturn.
Durable goods led the December showing, with after-inflation output increasing by 0.54 percent, the best showing since June’s 0.92 percent. And the durable goods increase in turn was paced by a 1.83 percent rise in real automotive production. Non-durable goods’ price-adjusted output, however, fell on-month by 0.29 percent, and this super-sector’s real production is still down on net since September, 2014 – meaning it remains in technical recession. October and November real manufacturing production revisions were negative. Annual price-adjusted manufacturing production rose by 0.38 percent for full-year 2016 after shrinking by 0.17 percent the year before. Inflation-adjusted factory output is still down by 4.11 percent since the onset of the Great Recession – nine years ago.
Here are the manufacturing highlights of the Federal Reserve’s new release on December industrial production:
>Inflation-adjusted manufacturing rose by 0.17 percent in December month-on-month – enabling the sector to remain out of technical recession by a hair despite slightly negative revisions for October and November output.
>Real manufacturing output is now 0.09 percent higher than in November, 2014.
>The new Federal Reserve data now peg October monthly real manufacturing production as having risen by 0.07 percent, not 0.33 percent, and November’s 0.03 percent drop is now reported as a 0.14 percent decline.
>Manufacturing’s December improvement was led by a 0.54 percent monthly increase in durable goods production – the super-sector’s best such performance since June’s 0.92 percent.
>Spearheading this durable goods performance, in turn, was a 1.83 percent monthly after-inflation production gain in the automotive sector.
>In contrast, price-adjusted non-durable goods production fell sequentially by 0.29 percent in December – its first such decrease since August.
>As a result, this super-sector remains in technical recession, as its real production is down on net fractionally since December, 2014.
>On a year-on-year basis, real manufacturing output rose by 0.38 percent in December. Between the previous two Decembers, constant-dollar production dipped by 0.17 percent.
>Annual durable goods’ real output also rose in 2016 (by 1.14 percent) after dropping (by 0.76 percent) in 2015.
>Non-durables output, however, decreased in 2016 (by 0.56 percent) after rising (by 0.54 percent) in 2015.
>Despite the year-on-year improvement in total real manufacturing output in 2016, this production still remains 4.11 percent below its level when the Great Recession began – nine years ago.