US Industrial Production Rises for Third Straight Month
US industrial production increased in July, marking the third consecutive month of gains, according to the Wall Street Journal.
Industrial production, which measures the output at factories, mines, and utilities, rose a seasonally adjusted 3% in July from June, the Federal Reserve announced on Friday. In June, industrial production rose 5.7 percent. A Wall Street Journal survey of economists had a prediction of a 2.8 percent increase in July.
Despite the significant rebound, the economic fallout from the coronavirus is still present. Industrial production is down 8.2 percent from a year earlier.
Rubeela Farooqi, chief U.S. economist for High Frequency Economics commented on the industrial production numbers, stating that it was “another strong increase in output.” “Output was boosted by a fuller reopening in July but weak demand and virus outbreaks that can interrupt activity remain a threat,” she wrote in a note to clients.
- Manufacturing is the largest contributor to production numbers. It rose 3.4 percent in July, driven by a 28.3 percent increase in car and car parts industries.
- Utility production increase by 3.3 percent as individuals used more air conditioning.
- Mining increased by 0.8 percent.
Capacity utilization, a measure of slack in the industrial economy, increased to 70.6 percent in July, beating economist expectations of 70.2 percent.