Commentary Directory

US Industrial Production: August 2023

Jacob Hess
September 15, 2023

US Industrial Production

9/15/2023 (August 2023)

+0.4% MoM (+0.2% YoY)

Above Expectations

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Manufacturing Production +0.1% MoM (-0.6% YoY)

In August, industrial production saw a growth of 0.4% MoM, with manufacturing output marginally increasing by 0.1% MoM. This subdued growth in manufacturing was primarily due to a significant -4.8% MoM decline in the production of motor vehicles and parts. However, other sectors witnessed positive momentum: mining output grew by 1.4%, utilities by 0.9%, and the production of defense and space equipment surged by 3.5%. Within the manufacturing domain, durable manufacturing saw a slight increase, nondurable manufacturing grew by 0.2%. Notably, mining's growth was driven by a 3% rise in oil and gas extraction. Overall, capacity utilization in August reached 79.7%, aligning with its long-term average from 1972-2022.

From Federal Reserve

Industrial production churned higher for the second straight month in the third quarter to help keep the annual increase positive. It’s worth noting that outside of the volatile movements in auto manufacturing over the last two months, industrial production has been in a consistent short-term uptrend. Industrial production (ex-auto) and manufacturing production (ex-auto) are up 1.2% and 0.6% from June to August. This means that industry is so far maintaining a positive contribution to growth in the current quarter despite the full force of rate hikes causing credit conditions to tighten. Suddenly, the industrial sector of the US economy is not looking so bad.