US industrial production rises for second month in July as manufacturing momentum builds

The Federal Reserve reported on August 18 that US industrial production edged up 0.1% in July, marking the second consecutive monthly increase. The gain was driven by higher output from both manufacturing and utilities.

The numbers behind the momentum

July’s 0.1% month-over-month gain mirrors the pace set in June, when industrial production also ticked up by the same margin.

The ISM Manufacturing PMI climbed to 55.6 in July from 53.3 in June. That’s the highest reading since May 2022, and anything above 50 signals expansion.

New orders within that same ISM report reached 56.7, a figure that suggests demand is actively growing.

Total industrial production in June stood at 102.6% of the 2017 average, representing a 1.1% year-over-year increase.

Capacity utilization tells a more nuanced story

Capacity utilization held steady at 76.1% in June, which sits below its long-run average. At 76.1%, American industry still has a meaningful amount of slack, meaning growth can continue without immediately bumping into supply constraints or triggering inflationary pressure from overheated production lines.

The Federal Reserve will release August industrial production figures in mid-September. Two months of 0.1% growth is encouraging. Three would start to look like a trend.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.