Here’s Why It’s Time for Manufacturing to Look Up
Overall industrial production increased 0.4 percent on the month in August, according to the U.S. Federal Reserve. The data narrowly missed expectations for a 0.5 percent increase and are slightly underwhelming after the zero percent growth experienced in July. Industrial production growth has struggled to remain positive over the past 12 months on the back of a fickle recovery in manufacturing and ongoing economic headwinds. The overall production index edged up 0.4 points to 99.4.
The Federal Reserve’s industrial production index is broken down into three major industry groups: manufacturing, mining, and utilities. The index and its components are pegged to a 2007 level of 100. The most-watched segment is manufacturing, which increased 0.7 percent on the month to 96. The increase in the manufacturing component came in ahead of expectations but follows a minor contraction in July. The manufacturing index is up 2.6 points on the year, compared to a 2.7 point annual increase in the overall index.
The production of durable goods increased 2.5 percent on the month, while the index for consumer nondurable goods declined 0.3 percent, its fifth consecutive month without positive growth. The rebound in durable goods production was led in part by strong gains in the production of automotive products.