The Federal Reserve's Industrial Production and Capacity Utilization report, released on June 18, 2024, provides a comprehensive overview of industrial production (IP) and capacity utilization for major market and industry groups within the industrial sector, which encompasses manufacturing, mining, and utilities. This monthly report is pivotal for government, business, and academia analysts, offering insights into current trends in industrial output and operational rates.

Key findings

1.    Overall industrial production:

• The total IP showed a slight year-over-year increase of 0.9% from May 2023 to May 2024, highlighting a modest recovery in industrial activity.
   

•  Monthly, the total IP remained unchanged in May 2024 after a 0.4% increase in April 2024

  2.    Market groups:

• Consumer goods: Experienced a minor year-over-year growth of 1.3%. Durable goods within this category saw significant fluctuations, with automotive products declining by 0.9%, and home electronics increasing by 9.7%

• Non-durable goods: Rose by 0.1% year-over-year, with chemical products standing out with a notable increase of 3.0%
   

  3.    Industry groups:

• Manufacturing output: Saw a slight year-over-year increase of 0.6%, driven primarily by gains in producing durable goods. However, the production of nondurable goods showed mixed results.
• Mining: recorded a year-over-year decline of 2.5%, reflecting challenges in the sector, particularly in crude petroleum and natural gas extraction.

• Utilities: Posted a significant increase of 2.2% year-over-year, largely due to higher output in electric utilities
  Capacity utilization

  The capacity utilization rate for the industrial sector was reported at 77.4% in May 2024, which is 2.4 percentage points below its long-term average from 1972 to 2023. This indicates that there remains significant unused capacity in the industrial sector, reflecting ongoing inefficiencies or potential for future growth

  Conclusion

  The June 2024 report underscores a mixed but positive trajectory for industrial production in the United States, with strength in utilities and certain durable goods sectors. However, challenges in the mining sector and varying performance across consumer goods highlight areas of concern. The report remains an essential tool for understanding the nuances of industrial performance and capacity utilization, providing critical data for economic planning and analysis.
  
  For more detailed information, visit the Federal Reserve's full report.