Tuesday, August 17, 2010

Rising industrial production signals continued expansion

Industrial production surged in July, rising a strong 1.1% following a small pullback in June and alleviating fears in some corners that the economy is poised to enter a new recessionCapacity utilization, which is a function of production, improved from 74.1% in June to 74.8%.

A sizable portion of July’s increase came from an almost 10% rise in auto and auto parts production.  But excluding the big increase in transportation, manufacturing still powered ahead.

Consumer spending has slowed and housing is still in the doldrums. However, manufacturing continues to gain ground and support economic activity, lessening concerns that the economy may slump.

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