Industrial production decreased 0.1% in August 2014, marking the first monthly loss since January. Manufacturing output in August declined 0.4% while utilities and mining production improved 1.0% and 0.5%, respectively. Total industry capacity utilization fell 0.3 percentage point (ppt) to 78.8% in August, which is 1.3 ppt under its 1972–2012 average, but 1.0 ppt above its level from the prior year.
The Purchasing Manager Index (PMI) for August 2014 advanced 1.9 ppts to 59.0%. Readings above 50 signify expansion in the manufacturing industry, and August 2014 was the fifteenth consecutive month of growth. Managers are reporting that economic conditions are stable, although geopolitical concerns remain. U.S. demand is strong, evidenced by growing order backlogs, and business activity is expanding for multiple sectors. The August report reflects continued growth in 17 of 18 manufacturing industries including petroleum & coal; primary metals; fabricated metal products; computer & electronic products; chemical products; plastic & rubber products; miscellaneous manufacturing; electrical equipment, appliances & components; transportation equipment; and machinery.
The Consumer Confidence Index advanced for the fourth consecutive month in August 2014 to 92.4, from July’s reading of 90.3. Consumer assessments remain positive regarding business conditions and job growth, although short-term outlooks for earnings in particular were marginally less optimistic.
New orders for manufactured durable goods climbed 22.6% or $55.4 billion in July 2014 to $300.2 billion, after June’s 2.7% increase. This is the highest level since 1992. July’s new orders for transportation equipment, led by commercial aircraft, surged 74.1% or $56.6 billion, to a total of $133.0 billion. July’s shipments of manufactured durable goods were up 3.5% or $8.3 billion, to $249.3 billion following a 1.2% gain in June.
Per the second estimate, real Gross Domestic Product (GDP) increased at an annual rate of 4.2% in Q2 2014 compared to a 2.1% contraction in Q1 2014. Q2 2014 gains were attributed to improvements in personal consumption expenditures, private inventory investment, residential/nonresidential fixed investments, and state and federal government spending. Although imports increased, exports experienced an upturn as well.
In August 2014, the chemical and allied products PPI increased to 283.5 from July’s reading of 282.8.