US Industrial Production Surges Most Since 2010 Amid Burst Of A/C Usage

Today’s data deluge continues with the latest Industrial Production data from the Fed, which rose 0.4% MoM in August, beating expectations of a 0.3% print, after July’s 0.1% print was revised higher to 0.4%.

Mining output rose 0.7% in August, the same as the prior month; it has advanced more than 14% in the past 12 months, supported by substantial increases in the oil and gas sector.

The biggest contributor to the August increase was the index for utilities, which moved up 1.2% in August, as a rebound for electric utilities – i.e., soaring use of HVACs to offset the sweltering August heat – outweighed a small decline for gas utilities.

However the key group inside the report, manufacturing production i.e. factory output, disappointed, increasing 0.2% in August, below the 0.3% expected, and was 3.1% higher than its year-earlier level. The index for durables rose 1.0% while the indexes for nondurables and for other manufacturing (publishing and logging) declined 0.5% and 0.9%, respectively.

Within durables, the largest increases were recorded by motor vehicles and parts, primary metals, and machinery, while the only sizable decrease was registered by furniture and related products. By contrast, within nondurables, only textile and product mills posted a gain.

Some more details:

  • Aug. consumer energy products posted a rise of 0.6% m/m after rising 0.2% in July, the Fed said
  • Aug. commercial energy products posted a rise of 0.9% m/m after falling 1.1% in July, the Fed said
  • The capacity utilization rate for petroleum and coal products fell to 78.9% from 79.2%

In any case, the overall data was quite solid, and YoY Industrial Production rose at the fastest pace since December 2010.