The Federal Reserve’s industrial production index measures real output from manufacturing, mining, electricity and gas company facilities located in the United States. These sectors are thought to be sensitive to consumer demand and so some leading indicators of GDP use industrial production figures as a component. The latest report has added to a relatively recent run of months in which US production has gone backwards.
According to the latest figures released by the Fed, US industrial production contracted by 0.2% in July, well under the 0.3% increase which had been expected and a further slowdown from June’s 0.2% increase after revisions. On an annual basis, growth in industrial production slowed to 0.5% from June’s revised rate of 1.1%.
ANZ economist Jack Chambers said, “All up, it seems the drag on US growth from manufacturing has continued into the start of Q3 [the September quarter].”