Industrial Production: Not Good News, Just Not So Quite Bad News

By July 15, 2009Economy, General

Associated Press, “Industrial activity logs smaller-than-expected dip“:

WASHINGTON (AP) — Industrial companies cut back production yet again in June but not nearly as deeply as they have been, another sign the recession is easing its grip.

The Federal Reserve reported Wednesday that production at the nation’s factories, mines and utilities fell 0.4 percent last month as the recession crimped demand for a wide range of manufactured goods, including cars, machinery and household appliances.

The decline, however, was not as bad as May.

National Association of Manufacturers President John Engler told the AP that the figure “are disappointing still.” He added: “Consumers aren’t in a position to lead the economy back.”

The summary from the Fed, notes that manufactured output fell at a rate of 0.6 percent in June, with declines in both durable and nondurable goods producers, but that’s compared to 1.1 percent in May. More details on manufacturing…

Production in manufacturing fell 0.6 percent in June after having dropped 1.1 percent in May. The factory operating rate declined further in June to a historical low of 64.6 percent; prior to this recession, the low for this series, which begins in 1948, was 68.6 percent in December 1982. For the second quarter as a whole, manufacturing output fell at an annual rate of 10.5 percent, a decline that was about one-half the rate of decrease recorded in the first quarter. Production of durable goods fell 0.7 percent in June: The indexes for machinery; computer and electronic products; electrical equipment, appliances, and components; and motor vehicles and parts all posted decreases of more than 1 percent. Output increased for several industries, most notably for wood products, primary metals, and miscellaneous manufacturing. The gain of 1.7 percent for primary metals follows 10 consecutive monthly decreases for the industry. The output of nondurable goods fell 0.4 percent: Declines in the indexes for food, beverage, and tobacco products; apparel and leather; paper; and chemicals were only partly offset by increases in the indexes for printing and support, petroleum and coal products, and plastics and rubber products.

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