U.S. Industrial Production Resumes Growth

The Federal Reserve released its monthly report on industrial production this morning, with the following highlights:

 1. At an index level of 94.2, industrial production in July was at the highest monthly level since August of 2008, almost three years ago (see chart above).

2.  Over the last year, industrial production has increased by 3.7%, and over the last three months industrial production has increased by 6% at an annual rate. 

3. On a monthly basis, industrial production increased by almost 1% from June to July, the highest monthly growth since December of last year.  

4. Manufacturing production increased in July by 3.8% on an annual basis. 

5. Sectoral growth over the last year was especially strong for business equipment (8.5%) and mining (6.6%).  On a monthly basis, motor vehicles and parts increased by a healthy 5.5% in July. 

MP: The strong industrial output growth in July, especially for autos and parts, suggests that the supply chain disruptions from the earthquake in Japan have eased, and the manufacturing sector is back on a positive growth trajectory.  The spring-early summer "soft patch" could be over.

Note: Industrial production measures real output.