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 was Unchanged in June
Posted Under: Data Watch • Industrial Production - Cap Utilization


Implications:  Don't be fooled by the weak headline number this morning; the details of today's report continue to demonstrate resiliency from the industrial sector.  Nearly all the month's weakness was from to utilities, which fell 3.6% due to milder-than-usual temperatures in June that reduced the demand for air conditioning.  (It was the coolest June for the contiguous 48 states since 2009.)  Aside from that series, gains were broad-based.  Auto manufacturing rose 2.9% in June following a similarly strong gain of 2.2% in May.  Meanwhile, manufacturing outside the auto sector (which represents the majority of activity) rose 0.2%.  Putting the two series together shows overall manufacturing rose 0.4% in June.  Even though non-auto manufacturing is only up a tepid 0.2% in the past year, the various capital goods production indices continue to outperform the broader index.  For example, over the past twelve months business equipment is up 1.8%, high-tech equipment is up 5.1%, and durable goods more generally are up 1.4%.  By contrast non-durable goods production is down 0.5%, demonstrating that the ongoing weakness in non-auto manufacturing growth isn't being driven by the death of business investment.  It's also important to keep in mind that manufacturing is only responsible for about 11% of GDP and is much more sensitive to global demand than other sectors of the economy.  Finally, mining activity posted a 0.2% increase in June, hitting a new record high.  In the past year mining is up 8.7%, showing the fastest year-over-year growth of any major category.  In other recent news from the manufacturing sector, the Empire State Index, which measures factory sentiment in the New York region, jumped back into positive territory by rising to +4.3 in July from -8.6 in June.  Expect similar rebounds from the various other regional manufacturing surveys in the month ahead.  On the housing front, the NAHB index, which measures homebuilder sentiment, rose to 65 in July from 64 in June. The higher optimism was driven by expectations of stronger sales activity and buyer foot traffic.

Click here for PDF version

Posted on Tuesday, July 16, 2019 @ 11:02 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.