Industrial production for May 2014 increased 0.6% following April’s 0.3% loss. Factory output in May rose 0.6% along with mining production, which strengthened 1.3%. Utilities output, however, decreased 0.8%. Total industry capacity utilization gained 0.2 percentage points (ppts) to 79.1% in May, which is 1.0 ppts under its 1972–2012 average, but 4.3 ppts above its level from the prior year.
The Purchasing Manager Index (PMI) for June 2014 decreased 0.1 ppts to 55.3%. Despite the decline, readings above 50 signify expansion in the manufacturing industry, and June 2014 was the thirteenth consecutive month of growth. Managers are reporting that business conditions are favorable and business activity is steady. The May 2014 report reflects growth in 15 of 18 manufacturing industries including petroleum & coal; primary metals; fabricated metal products; computer & electronic products; miscellaneous manufacturing; electrical equipment, appliances & components; transportation equipment; and machinery. Chemical products and plastic & rubber products reported contraction in June.
Following May's improvement, the Consumer Confidence Index advanced to 85.2 in June 2014 from the previous month’s revised reading of 82.2. This marks the highest level since January 2008. Consumer assessments of business conditions were generally positive, as were the outlooks for the short-term economy and job availability.
Per the advanced report, new orders for manufactured durable goods increased 0.8% or $1.9 billion in April 2014, to $239.9 billion after March’s 3.6% improvement. April shipments of manufactured durable goods were down 0.2% or $0.6 billion, to $237.2 billion following a 1.3% rise in March. Further, new orders for transportation equipment continued an upward trend, growing 2.3% or $1.7 billion in April, to a total of $76.9 billion.
Per the third estimate, real Gross Domestic Product (GDP) declined at an annual rate of 2.9% in Q1 2014. Real GDP in Q4 2013 increased 2.6%. Although the Q1 2014 second estimate projected a 1.0% decrease of real GDP, the gains from personal consumption expenditures and exports were not as significant as initially reported. Furthermore, diminished fixed investments, reduced state and federal government spending, and increased imports collectively detracted from Q1 real GDP.
In May 2014, the chemical and allied products PPI declined to 280.5 from April’s reading of 283.4.