July Industrial Production/Capacity Utilization Preview
July Industrial Production is expected to be unchanged after a 0.5% increase in June and a 0.2% decline in May. Capacity Utilization in July is expected to narrow marginally to 79.8%.
Mining production should provide the largest boost to July IP as the mining hours-worked component in the July employment report revealed a 2% increase. Mining production grew 1.1% in June following a 0.3% increase in May.
Improved auto production is also expected to provide some marginal support for July IP. Vehicle production grew 5.4% in June following a 0.6% increase in May and a 6.7% decrease in April.
Weakness in manufacturing is expected to drag on July IP as the July employment report showrd continued declines in the manufacturing hours-worked component. Utilities production in July is expected to pull back from its 2.1% surge in June.
The July ISM Production Index improved to 52.9 from 51.5, which suggests a muted month in the manufacturing sector.