Whereas the last few U.S. manufacturing production reports from the Federal Reserve have overwhelmingly been one story – automotive –this morning’s findings (covering July) are notable for at least two other stories: unusually large downward May and June revisions for the entire sector when it comes to their inflation-adjusted growth, and despite that discouraging news, the more positive development that stripping out automotive from the overall totals, manufacturing has now been growing pretty steadily for three straight months.
The new Fed figures show that in toto, real manufacturing output grew sequentially by 3.41 percent. That figure, too, is now up for three straight months.
But those revisions! June’s originally estimated 9.06 percent jump is now judged to have been only a 7.52 percent improvement – still excellent, but much lower. And after being revised up to 5.06 percent, May’s increase is now pegged at 3.88 percent.
As implied above, automotive outperformed the rest of manufacturing by a mile. Its July monthly production advance came in at 28.29 percent – much less than the May and June rocket rides, but still extraordinary. And the numbers for the May and June comebacks have held up well. The former, previously reported as a 117.12 percent surge, is now judged to have been 110.97 percent. And the June number was revised up from 115.02 percent to 118.33 percent. In other words, price-adjusted production of vehicles and parts combined still more than doubled in both May and June, reflecting both the reopening of factories from earlier spring shutdowns, but strong demand from consumers.
The data for the rest of manufacturing have been considerably less spectacular. But these industries did collectively boost their constant dollar output in June by 1.63 percent sequentially. And the May and June monthly results are still 2.04 percent and 3.66 percent, respectively. Arguably that’s an impressive performance given not only the worst overall U.S. economic slump since the Great Depression of the 1930s, but the stop-start nature of the CCP Virus’ spread and, therefore, of many individual states’ lockdowns and shutdowns.
All the same, let’s close with some statistics that make clear how mind-blowing automotive’s production performance has been during the pandemic. Since February – the last month before major numbers of virus infections started appearing and as a result major economic disruption began – total inflation-adjusted U.S. manufacturing output is down 7.84 percent. Leaving out automotive, real production is off by 8.65 percent during this period. And automotive itself? It’s practically back to normal, with its July price-adjusted manufacturing output just 0.32 percent lower than February’s levels.