The Federal Reserve yesterday announced that a solid rebound in American manufacturing, particularly in vehicles, following two months of declines, had helped push overall industrial production up in July.
The data from the Federal Reserve report revealed that a massive 6.6% surge in motor vehicle and parts production was a key driver the 0.7% rise in manufacturing, representing the biggest gain since March.
That unexpected surge in vehicle production boosted total industrial output by 0.6% last month, which was double the consensus forecast among economists.
The gain was welcome news for the industry and contrasted with the massive decline in a regional survey by the New York Fed for the first week of August, which created mild panic for investors on Monday.
“Manufacturing activity is cooling, but retains some momentum; no indications of a massive pullback,” stated Gregory Daco, chief economist of EY Parthenon.
“I’d downplay the huge drop in the Empire State survey & focus on the ISM readings pointing to cooling activity,” Daco revealed on Twitter, the latter statement referring to a nationwide survey that showed a slowdown but continued growth last month.
Good news was not only restricted to the motor industry as mining production also rose 0.7%, on “gains in coal mining and in oil and gas well drilling,” while utilities fell 0.8%.
The report revealed that overall production was 3.9% higher compared to July 2021, while manufacturing has risen by 3.2% compared to the equivalent period last year.
A further positice development was that industrial capacity in use edged back over 80%, to 80.3%, after slipping below that threshold in June.