Last updated: July 18, 2023 at 10:03 am ET
First published: July 18, 2023 at 9:34 am ET
The numbers: U.S. industrial production fell 0.5% in June, leading to declines in most market groups, the Federal Reserve reported Tuesday.
The decline was below expectations for a flat reading, according to a Wall Street Journal survey of economists.
May’s revised 0.5% output fell, down from initial estimates of 0.2%…
Numbers: U.S. industrial production fell 0.5% in June, with declines across most market groups, the Federal Reserve reported on Tuesday.
The decline was below expectations for a flat reading, according to a Wall Street Journal survey of economists.
May’s revised output fell 0.5%, up from the initial estimate of a 0.2% decline.
Capacity utilization dropped to 78.9% from last month’s revised 79.4%. It is higher than the 80.8% reached last September.
Economists had predicted a 79.5% rate.
The capacity utilization rate reflects the operating constraints of the country’s factories, mines and utilities.
June’s level matches the capacity utilization seen last December. The last time the capacity utilization rate was lower was in October 2021.
Key Details:- Manufacturing fell 0.3% in June after falling 0.2% the previous month.
Output of motor vehicles and parts fell 3% after a 0.8% increase last month. Total industrial production, excluding automobiles, fell 0.4 percent.
Consumer products fell 2.6% in June. Mineral production, which includes oil and natural gas, fell 0.2% after falling 1.4% last month.
Big picture: Industrial production rose at a 0.7% annual rate for the second quarter, led by a 36.7% jump in auto-production. This masked weakness in other sectors.
“Slowing demand for manufactured goods, rising consumer prices and uncertainty about outlook are pushing manufacturers to be cautious and cut production,” said Mickey Levy, chief economist for Asia and the Americas at Bernberg Capital Markets. .
what are you saying Kieran Clancy, senior US economist at Pantheon Macroeconomics, said in a note to clients: “The view here is that much of the manufacturing sector remains in remission and we see few signs of relief on the horizon.”
The post-zero-Covid recovery of China’s manufacturing sector is already faltering, and a strong fiscal response from the Chinese authorities is highly unlikely. “Domestic US capital spending, meanwhile, is suffering from the weight of higher borrowing costs, even though the capital spending objective in regional federal manufacturing surveys may be lower,” she added.
Market response Shares
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The yield on the 10-year Treasury note opened higher.
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It is down to 3.78%.
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