Last week's big jump in industrial production together with July's
strong employment report lifted the national activity index to plus 0.27
from June's revised plus 0.05. The 4-week average is improving but
remains negative, at minus 0.10 vs minus 0.12 in June.
Of the
four major components, production is the strongest in the report,
contributing 0.23 to the index and reflecting July's 0.5 percent gain in
manufacturing production and 4 tenths increase in manufacturing
capacity utilization to 75.4 percent. The employment component
contributed 0.09 to the index for a 4 tenths increase from June. The
other two components, sales/orders/inventories and personal consumption
& housing were steady, at plus 0.01 and minus 0.06 respectively.
The
small dip for the personal consumption & housing component is no
surprise given the month's weakness in retail sales. But even without
strength in consumer spending, July proved to be a strong month for the
economy.
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