Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Industrial production surges 0.9% in July, blowing away expectations
Posted Under: Data Watch • Industrial Production - Cap Utilization
Supporting Image for Blog Post

 
Implications: As of July, the soft patch in manufacturing had ended. Industrial production surged 0.9% in July, the largest monthly gain this year. The July jump was fueled by a 5.2% expansion in auto production.  This monthly increase – at an 83% annualized rate - suggests that the supply-chain disruptions coming from Japan have ended.  We expect more increases like this in the next few months.  Excluding autos, manufacturing production increased 0.2% in June, and is up 4% versus a year ago.  Corporate profits and cash on the balance sheets of non-financial companies are at record highs.  Meanwhile, companies can fully expense these purchases for tax purposes through year-end.  This suggests business equipment purchases and production should rise as the second half of 2011 unfolds.  Today's report also showed that capacity utilization hit its highest level since August 2008, coming in at 77.5. As it did in 2010, the industrial sector has reasserted its leadership of the recovery.  The rise in overall, nation-wide production during July suggests that the weakness reported by the Empire State manufacturing index (which fell to -7.7 in August from -3.8 in July) is unlikely to continue.  We believe that purchasing managers surveys have become less reliable.  They seem to be influenced more by emotion and uncertainty than they have in the past.

Click here for the full report.
Posted on Tuesday, August 16, 2011 @ 10:02 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.