July 20, 2023
Industrial production in the US declined 0.5 percent in June for a second consecutive month but advanced 0.7 percent at an annual rate for the second quarter as a whole. Manufacturing output moved down 0.3 percent in June but rose 1.5 percent in the second quarter. In June, the indexes for mining and utilities fell 0.2 percent and 2.6 percent, respectively. At 102.2 percent of its 2017 average, total industrial production in June was 0.4 percent below its year-earlier level. Capacity utilization stepped down to 78.9 percent in June, a rate that is 0.8 percentage point below its long-run (1972–2022) average.
Market Groups
Most major market groups posted declines in June. The index for consumer durables fell 2.7 percent, led by notable decreases in the output of appliances, furniture, and carpeting (3.8 percent) and of automotive products (3.6 percent). The decrease of 0.9 percent in the index for consumer nondurables reflected declines in clothing (2.1 percent), energy (1.8 percent), and food and tobacco (1.3 percent). Within business equipment, an increase in the index for information processing was offset by decreases in the indexes for transit and for industrial and other. Defense and space equipment posted the only gain of 1.5 percent or greater among the market groups.
Industry Groups
Manufacturing output moved down 0.3 percent in June. For the second quarter, factory output moved up 1.5 percent at an annual rate, buttressed by a second-quarter jump of 36.7 percent in the production of motor vehicles and parts during the quarter. In June, the indexes for nondurable manufacturing and durable manufacturing fell 0.6 percent and 0.1 percent, respectively; the index for other manufacturing (publishing and logging) edged down 0.2 percent. Within nondurables, only chemicals recorded an increase, whereas decreases of at least 1 percent were recorded by most other industries. Notable declines occurred in the indexes for printing and support (2.5 percent) and petroleum and coal products (1.6 percent). The index for durable manufacturing, on the other hand, posted more mixed results in June, with declines in the output of motor vehicles and parts (3.0 percent) and of nonmetallic mineral products (1.2 percent) being mostly offset by gains elsewhere.
Mining output inched down 0.2 percent in June and declined 1.1 percent at an annual rate in the second quarter. Within mining, a drop of 2.8 percent in the index for oil and gas well drilling in June was nearly offset by a gain in oil and gas extraction. The output of utilities fell 2.6 percent in June and 2.0 percent in the second quarter.
Capacity utilization for manufacturing edged down to 78.0 percent in June, a rate that is 0.2 percentage point below its long-run (1972–2022) average. The operating rate for mining ticked down 0.1 percentage point to 91.6 percent, and the operating rate for utilities dropped 2.1 percentage points to 68.5 percent. The rate for mining was 5.2 percentage points above its long-run average, while the rate for utilities remained well below its long-run average.
Source: The Federal Reserve
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