News Flash

U.S. industrial production expanded for a second consecutive month in July, creeping up by 0.2% while capacity utilization ticked higher to 76.3%. Data released this morning by the Federal Reserve Board (FRB) slightly missed Wall Street consensus estimates of a 0.3% gain, but a major upward revision to June's data cushioned the slight miss. 

🏭 Industrial Production Breakdown

• Headline Growth: Total industrial production rose 0.2% month-over-month, bringing the aggregate index to 103% of its 2017 baseline. 
• June Revision: June’s growth rate was revised significantly higher to 0.3%, up from the initially reported 0.1% increase. 
• Manufacturing Resilience: Output at factories edged up 0.2%. Gains were driven by a 0.4% advance in non-automotive sectors, which successfully offset a sharp 2.1% plunge in motor vehicles and parts production.
• Energy & Mining Utilities: Mining production expanded by 0.2%. Utilities output climbed 0.5%, reflecting broad regional demand spikes for both electricity and natural gas extraction. 
• Market Groups: Business equipment production grew by 0.8%, and defense and space equipment surged 1.8%. However, consumer durable goods dragged the index down with a 1.4% drop. 

📊 Capacity Utilization Gains

• The Operating Rate: The nation's total capacity utilization rate rose to 76.3% in July, matching analyst expectations and climbing from June's upwardly revised 76.2% level.
• Historical Gap: Despite the monthly gain, the utilization index sits 3.1 percentage points below its long-run (1972–2025) average. This indicates a lingering cushion of spare industrial capacity across domestic factories.
• Sector Utilization Breakdown: Manufacturing operating rates climbed to 76% (2.2 points below its historical mean). Mining capacity stepped up to 86.1%, and utility capacity moved to 70%.