Industrial production in August 2016 decreased 0.4% after rising 0.6% in July. Manufacturing output was down 0.4%, while the utilities index declined 1.4%. Mining rose 1.0%, the fourth consecutive monthly increase, but is off 9.3% year-over-year. Total industrial production was 1.1% below August 2015’s average while industrial capacity utilization gained 0.4 ppt to 75.5%, a rate that is 4.5 ppts below its 1972 to 2015 average.
The Purchasing Managers' Index (PMI) rose 2.1 ppts in September 2016 to 51.5%, with a value above 50% signifying expansion in the manufacturing industry. September’s PMI reflects growth in seven of 18 industries including: computer & electronic products; and miscellaneous manufacturing. The 11 industries reporting contraction include: transportation equipment; machinery; primary metals; fabricated metal products; and electrical equipment, appliances & components. Assessments from metal industry-related respondents were generally optimistic in September as metal fabricators cited increased sales and an improved outlook for Q4, however, transportation equipment manufacturers are concerned with the overcapacity in seaborne shipping and low freight rates.
The Consumer Confidence Index improved to 104.1 in September 2016, up 2.3 ppts from 101.8 in August, its highest level since the recession. The index’s change reflects stronger consumer sentiment regarding the labor market.
New orders for manufactured durable goods in August 2016, per the full report, advanced 0.1% or $0.3 billion to $227.3 billion following a 3.6% increase in July. August shipments of manufactured durable goods fell 0.2% or $0.4 billion to $232.2 billion. Shipments of fabricated metal products, machinery, communications equipment, motor vehicles & parts as well as defense aircraft & parts were up, but the decline in transportation equipment of 0.9% or $0.7 billion to $80.0 billion drove the decrease in overall shipments.
Per the third estimate, real Gross Domestic Product (GDP) grew at an annual rate of 1.4% in Q2 2016, versus 0.8% expansion in Q1 2016. This update reflects a 0.3 ppt increase from the Q2 2016 second estimate of 1.1%. Q2 growth was attributed to positive contributions from personal consumption expenditures, exports and nonresidential fixed investment that were partly offset by negative results from private inventory investment, residential fixed investment as well as state and local government spending. Imports, a detractor from GDP, increased.
In August 2016, the preliminary chemical and allied products Producer Price Index (PPI) advanced to 264.2 from July’s reading of 263.0.