US industrial production up 3%; factory output rises 3.4%

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US industrial production up 3%; factory output rises 3.4%

US Federal Reserve said in a statement on Friday that the US industrial production including outputs at mines, utilities and factories had soared 3 per cent in July, suggesting that the American industries had continued to regain their footings lost in the pandemic-rampaged second quarter of the year, however, the scale of production remained far lower than the pre-pandemic level.

Aside from that, the US Federal Reserve had also added at its Friday’s statement that the production remained roughly 8.4 per cent below its February-level before the US economy entered into a recession. Besides, last month’s gain in US Industrial production followed a 5.7 per cent upsurge in June, hinting that a steady spike in pandemic cases across the densely populated US cities had begun to take a toll on the outputs.

In tandem, other economic data released on Friday had revealed that the US factory activity had flared up 3.4 per cent in July, largely buoyed up by a 28.3 per cent gain in the production of auto parts, passenger vehicles, SUVs and pickup trucks.

US Industrial production, factory output rise as economy slowly regains momentums

Apart from that, despite lofty gains over the recent months, the pandemic alongside the efforts to contain it and the circumspection among potential investors and consumers, leading to a battering of the US economy over this spring, had led to a 43.2 per cent retreat in US industrial production over the second quarter of the year compared to the same time a year earlier, the US Federal Reserve had added.

Meanwhile, mining productions had witnessed an uptick of 0.8 per cent, sapping a five-straight month of declines mostly galvanized by the pandemic-led closures, while utility output rose by 3.3 per cent as an unprecedentedly warmer summer weather had forced many Americans to turn on their air conditioners.

However, as of July 31, industries had been running at 70.6 per cent of their full capacity, well-below from their 48-year average of 79.8 per cent. Meanwhile, citing a bleaker outlook ahead for the US Industrial Production and Factory Activity, a chief economist at High Frequency Economics, Rubeela Farooqi wrote in a client report, “The level of activity is still subdued.

Output was boosted by a fuller reopening in July but weak demand and virus outbreaks that can interrupt activity remain a threat going forward.