US Industrial Output Spikes 5.4% on Reopening, Most Since 1959

US Industrial Output Spikes 5.4% on Reopening, Most Since 1959

#Industrial #Output #C19Coronavirus #Reopening #Manufacturing #Fed

US industrial production in June posted the largest monthly gainer since Y 1959, indicating manufacturing is alive and well after C-19 coronavirus chaos related shutdowns.

Total output at factories, mines and utilities increased 5.4% from the prior month after climbing 1.4% in May, Fed data showed Wednesday.

The median projection in a survey of economists called for a 4.3% advance. Factory output jumped 7.2%, the biggest gainer since 1946.

The expanded rebound in production still leaves the Fed’s index of industrial output 10.9% below pre-medical emergency chaos marks and the capacity utilization rate shows slack as demand builds only gradually.

Sales may be tempered in coming months as reopenings have entered a more uncertain frame, with states like California imposing renewed lockdown measures.

In Q-1, industrial production fell an annualized 42.6%, the biggest setback in the post WWII era.

Capacity utilization, which measures the amount of a plant in use, increased to 68.6% from a revised 65.1% in May; it was 76.8% in February.

Extra capacity can weigh on corporate profits because business capital is underutilized, and it also signals a slowed capital spending outlook.

The increase in factory output was led largely by vehicle and parts output, which surged 105%.

Ex-auto production, factory output rose 3.9% as all major industries registered gains for the month.

The Fed’s report showed utility output increased 4.2%, while mining dropped 2.9%, the 5th straight monthly decrease.

Oil & Gas well drilling declined 18% after a 36.9% slide a month earlier. Drilling is down 70% from a year earlier after a slump in Crude Oil prices several months ago prompted cutbacks in exploration.

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.