The on again, off again, pickup in the nation's economic advance was back on again in June--at least from the point of view of industrial production and to a lesser extent factory utilization. To wit, industrial production showed an increase of 0.3% last month, easily eclipsing both the expected gain of 0.1% and the flat May reading.
All told, this was the best performance by this sector since February, when such output had soared by 0.7%. Since that brief burst of strength, this sector has increased by 0.2% in March, fallen by 0.3% in April, and shown no change in May. Overall, such output is up by 2.0% for the past year.
As to the three components in this category, we saw that manufacturing output rose by 0.3% during the month, thus matching the aggregate industrial production increase of 0.3%. At the same time, mining production soared by 0.8%, while output at the nation's utilities edged lower by a scant 0.1%. Manufacturing is by far the latest of the three components.
This moderate strengthening in industrial production in June was not quite matched from the standpoint of factory usage, or capacity utilization, which edged up by just a token 0.1% last month, improving from 77.7% to 77.8%. That rate had ticked down from the 78.2% level in place during both February and March. Here, too, manufacturing use rose slightly, going from May's 76.0% to 76.1% in June. The May result, meantime, had been revised up from the initially estimated 75.8%.
As to the other two categories in this sector, we saw mining utilization increase from 87.6% in May to 87.9% last month. Conversely, utility usage eased from 77.7% to 77.6%. Given the heat wave now in place across much of the nation, we would assume that there might by some upward pressure on capacity use in the utility sector this month.
Here, as was the case with the tame core inflation rate reported in today's Consumer Price Index, this wasn't a game changer. As such, it was a report that should not influence the Federal Reserve to shift monetary gears before it has been planning.At the time of this article's writing, the author did not have positions in any of the companies mentioned.