American industry regaining ground; factory output up

Business | 14 Aug 2020 9:57 pm

American industry continued to regain ground lost in the coronavirus recession last month, but production remains well below where it was before the pandemic struck.

The Federal Reserve reported Friday that industrial production — including output at factories, mines and utilities — climbed 3 percent in July after surging 5.7 percent in June. Still, production remains 8.4 percent below its level in February before the outbreak began to spread rapidly in the United States.

Mining production ticked up 0.8%, snapping five straight months of decreases. Utility output climbed 3.3% as hot weather forced many Americans to turn on the air conditioner.

Industry was running at 70.6 percent of capacity, up from its April low of 64.2 percent but well below its long-term (1972-2019) average 79.8 percent.

The coronavirus, the lockdowns meant to contain it, and the wariness of consumers and businesses in a health crisis hammered American industry this spring. Overall output retreated at a 43.2 percent annual rate from April through June, biggest drop since the demobilization that followed World War II.

Industrial production has now risen three straight months as the U.S. economy began to reopen after being locked down in the spring. But a resurgence of coronavirus infections has raised doubts about whether the economy’s comeback is sustainable.

“The level of activity is still subdued,″ Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report. “Output was boosted by a fuller reopening in July but weak demand and virus outbreaks that can interrupt activity remain a threat going forward.″

Factory output grew by 3.4 percent last month, pulled higher by a 28.3 percent gain in production of cars, trucks and auto parts.-AP


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