The Federal Reserve’s new industrial production figures for December revealed that inflation-adjusted U.S. manufacturing output growth has slowed substantially. Its fractional (0.08 percent) monthly increase represented its worst sequential performance since August’s 0.14 percent dip. December’s near-standstill, moreover, followed a November upwardly revised 0.31 percent improvement that was much slower than October’s upwardly revised hurricane bounceback growth (1.50 percent). In addition, the December weakness was widespread, with real sequential growth in the durable goods supersector decelerating from November levels and such output decreasing in non-durables.
Nonetheless, domestic manufacturing’s full-year 2017 price-adjusted growth of 2.64 percent was its best annual increase since the 2.71 percent registered in 2011. For non-durable goods, its 2.64 percent annual real production advance was its best since 2005’s 3.95 percent. Inflation-adjusted production in the automotive sector rose on-month by 2.03 percent – its best rate since August’s 3.47 percent. Yet combined motor vehicles and parts output after inflation remained in a technical recession, standing 0.16 percent lower in December than in April. The December figures show that, adjusted for inflation, American manufacturing remains 2.25 percent smaller than when the last recession began, a decade ago..
Here are the manufacturing highlights of the Federal Reserve’s release on December industrial production:
>New Federal Reserve industrial production figures showed that a U.S. manufacturing production growth slowdown – which began in November following October’s hurricane bounceback – extended into a second month in December.
>After-inflation manufacturing output rose on month by a bare 0.08 in December, the worst such performance since August’s 0.14 percent sequential dip.
>Real monthly production for November was revised up from 0.22 percent to 0.31 percent, but that figure still represented a major decrease from the 1.50 percent constant dollar sequential growth in October – when industry mounted a comeback from early autumn’s hurricanes. The October figure was also revised up (for the second time) from 1.45 percent.
>The softness in the December manufacturing output figures was widespread. In the durable goods supersector, real production increased sequentially by a respectable 0.27 percent. But that performance was down from November’s 0.43 percent and October’s 0.54 percent.
>Constant dollar output in non-durable goods – the supersector most heavily affected by the hurricanse – fell sequentially in December by 0.12 percent. Its monthly price-adjusted growth in October and November was 2.57 percent and 0.17 percent, respectively.
>Viewed from a year-on-year perspective, manufacturing’s performance was much better. It’s full-year 2017 inflation-adjusted production increase of 2.64 percent was the best since 2011’s 2.71 percent – which was achieved much earlier in the current economic recovery.
>Durable goods’ growth of 2.65 percent in real terms in 2017 was its fastest rate since 2012’s 4.26 percent.
>For non-durable goods, its identical 2.64 percent real year production rise was its best such performance since 2005’s 3.95 percent.
>December was the best month for automotive output – which increased after inflation sequentially by 2.03 percent – since August’s 3.47 percent.
>But this crucial sector remained in technical recession, as its December inflation-adjusted production down by 0.16 percent since April.
>As of the December figures, after adjusting for price changes, American domestic manufacturing still remained 2.25 percent smaller than when the last recession broke out – ten years ago.