June U.S. Factory Output Slips for 2nd Straight Month - Modern Distribution Management

June U.S. Factory Output Slips for 2nd Straight Month

The decline reflected a broad industrial deceleration, led by a contraction in consumer durable goods.
Factory constructions, industry technology, manufacturing iterio

U.S. industrial production fell for a second straight month in June, according to the Federal Reserve. The decline reflected a broad industrial deceleration, led by a contraction in consumer durable goods.

The Federal Reserve data showed that June overall industrial production fell by 0.5% from May and was down 0.4% year-over-year. It marked the index’s first year-over-year decline since February 2021. The April-to-May decline was likewise 0.5%. The past two months follow month-to-month gains in March (0.1%) and April (0.6%).

Within the Fed’s Industrial Production Index, its readings for Manufacturing fell 0.3% month-to-month in June (-0.2% in May) and was down 0.3% year-over-year. Its mining index fell 0.2% month-to-month in June (-1.4% in May) and was up 2.8% year-over-year. The Fed’s Utilities index fell 2.6% month-to-month in June (-1.5% in May) and was down 6.2% year-over-year.

For the major market groups the industrial production index covers:

  • Consumer Goods output fell 1.3% month-to-month in June (-0.5% in May) — its biggest one-month drop since February 2021 — and was down 0.7% year-over-year
  • Business Equipment output was flat in June month-to-month (-0.4% in May) and was down 0.2% year-over-year
  • Construction output was up 0.3% month-to-month (+0.2% in May) and was down 1.1% year-over-year
  • Materials output was down 0.4% month-to-month (-0.6% in May) and was flat year-over-year

The Fed’s capacity utilization measure — a guage of potential factory output being used — fell to a three-month low of 78% in June, while the overall industrial utilization rate declined to 78.9%.


source: tradingeconomics.com

Read more about the Fed’s data for June industrial production here.

The past two months of factory output decline coincide with the down-trending manufacturing purchasing managers index (PMI) from the Institute for Supply Management, which showed a June reading of 46.0% — down another 0.9 percentage points from May and the lowest since May 2020’s 43.1%. Any PMI reading below 50.0% indicates industrial economic contraction.

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