May U.S. Industrial Production Dips; Up 2.2% Year-Over-Year

Industrial production fell 0.4 percent in May after a large increase in April, with the indexes for most market groups posting declines. That includes a 0.6 percent dip in business products.

Id 26761 Industrial

Industrial production was unchanged in May following a large increase in April and smaller increases in February and March. Manufacturing output declined 0.4 percent in May; the index is little changed, on net, since February. The indexes for mining and utilities posted gains of 1.6 percent and 0.4 percent, respectively, in May. At 105.0 percent of its 2012 average, total industrial production in May was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector edged down 0.1 percentage point in May to 76.6 percent, a rate that is 3.3 percentage points below its long-run (1972–2016) average.

Market Groups

The output of consumer goods rose 0.2 percent in May. The indexes for consumer energy products and consumer non-energy nondurables rose 1.0 percent and 0.3 percent, respectively, but the index for consumer durables decreased 0.8 percent. Business equipment posted a decline of 0.7 percent, with all of its major components registering decreases. The output of defense and space equipment rose 0.6 percent, while the indexes for construction supplies and business supplies each moved down 0.3 percent. The production of materials edged up 0.1 percent, with a gain of 1.0 percent for energy materials outweighing a sizable decline for durable materials and a smaller decline for nondurable materials.

Industry Groups

Manufacturing output decreased 0.4 percent in May following a strong gain in April. Factory production has increased 1.4 percent over the past 12 months. The index for durables fell 0.8 percent in May, while the index for nondurables edged up 0.1 percent; the output of other manufacturing (publishing and logging) moved up 0.3 percent. Almost all major industry groups within durables posted declines; within nondurables, a large gain in chemicals outweighed declines in most other industries.

Mining output rose 1.6 percent in May. Production has increased about 1.5 percent per month, on average, so far this year; the index in May was 8.3 percent higher than its year-earlier level. Even so, output in May was still 10.0 percent below its peak in December 2014. The index for utilities advanced 0.4 percent, as higher output for gas utilities more than offset a small decrease for electric utilities.

Capacity utilization for manufacturing declined 0.3 percentage point in May to 75.5 percent, a rate that is 2.9 percentage points below its long-run average. Durables recorded a decrease in utilization, while nondurables and other manufacturing (publishing and logging) each posted increases. The operating rate for each group remained below its respective long-run average; the greatest shortfall was for other manufacturing. Utilization for mining moved up 1.1 percentage points to 84.3 percent but remained below its long-run average. The operating rate for utilities rose 0.3 percentage point to 76.6 percent.

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