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(What’s Left of) Our Economy: Manufacturing Output Rebounds in May but a Long Steel Recession Continues

This is a syndicated repost published with the permission of alantonelson.wordpress.com. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The Federal Reserve released the May industrial production figures this morning, the news was mostly good.  The Fed data showed that inflation-adjusted U.S. manufacturing output rose strongly enough last month to send it back above the peak it hit just before the last recession began – in December, 2007.  Also encouraging was the acceleration revealed in real manufacturing production on both month-to-month and year-to-year bases.  One remaining concern:  The U.S. steel industry, pressured by dumped imports, remains in a recession that began back in August, 2011.

Here are the crucial details:

>Real U.S. manufacturing output rose by 0.65 percent on-month in May, according to the Fed, and April’s monthly production decline was revised upwards from 0.34 percent to 0.11 percent.

>These increases pushed inflation-adjusted manufacturing output 0.18 percent above its pre-recession peak, achieved in December, 2007.

>Real manufacturing output is accelerating not only month-on-month but year-on-year.  From January, 2013 to January, 2014, this production rose by 1.75 percent.  The comparable May increase was 3.81 percent.

>Encouragingly, both the latest April and May year-on-year increases have exceeded their counterparts for 2012-13.  The May, 2013-14 annual improvement of 3.81 percent topped its 2012-13 predecessor of 2.91 percent, and the latest April annual gain of 3.42 percent topped its predecessor of 2.44 percent.

>The May Fed figures, however, brought no such good news for the U.S. steel industry.  Its real output fell 1.34 percent on month as artificially cheap imports subsidized by foreign governments kept flooding U.S. markets.  U.S. inflation-adjusted steel output is now down on net for a nearly three-year period (since August, 2011).

>The gap between the fortunes of America’s durable and nondurable goods manufacturers remained substantial in May.  Real output in the former increased by 0.89 percent over April, while the latter grew by 0.38 percent.

>Year-on-year, real May durable goods production jumped by 5.29 percent, versus 2.15 percent for nondurable goods.  Yet real output in both is now accelerating on a year-on-year basis.

>More dramatically, inflation-adjusted durable goods production is now 6.78 percent above its December, 2007 pre-recession peak.  Real nondurable goods output is still 8.08 percent its July, 2007 pre-recession peak.

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