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17 August 2017
 |
| U.S. Factorys (The Total Investment & Insurance Solutions) |
A slump in the auto industry drove U.S. factory output down in July and
has kept it flat for months.
The Fed said Thursday that factory production
dropped 0.1 percent last month, pulled down by a 3.5 percent plunge in output
of cars, trucks and auto parts. Auto production has dropped for three straight
months and is down 5 percent over the past year. Auto sales, which have been
strong in recent years, skidded 7 percent in July.
The drop in automotive production was
partially offset in July by a 0.2 percent rise in other manufacturing output.
Overall industrial production — which adds
output by mines and utilities — rose 0.2 percent, the Fed said. Mining output
rose 0.5 percent, and utility production rose 1.6 percent.
American manufacturers had bounced back from
a slump in late 2015 and early 2016 caused by cutbacks in the energy industry
and a strong dollar, which makes U.S. goods costlier in foreign markets. But
the Fed says manufacturing output was little-changed from February through
July.
Other recent reports on American
manufacturing have looked stronger.
The Federal Reserve Bank of New York on
Tuesday reported that factory activity in New York shot up to the highest level
in nearly three years. The Total
Investment & Insurance Solutions
The Commerce Department reported earlier this
month that orders at U.S. factories surged in June on strong demand for
civilian aircraft. The Institute for Supply Management reported that American factories
expanded in July for the 11th straight month. The Total Investment & Insurance Solutions
Factories have hired 66,000 workers since
July 2016, biggest 12-month gain in nearly a year and a half.
Ian Shepherdson, chief economist at Pantheon
Macroeconomics, said the Fed's report Thursday is "is very hard to
square" with other manufacturing indicators. He expects to see "a
clear and substantial rebound in August" or an upward revision in the July
figures. The Total Investment &
Insurance Solutions
"The manufacturing recovery continues,
after the hit from collapsing oil sector capex in 2015/16, but progress is
slow," Shepherdson wrote in a research note. The Total Investment & Insurance Solutions
The Fed inadvertently released the report on
its website before the scheduled release time of 9:15 a.m. Eastern.The Total Investment & Insurance
Solutions
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