Industrial production moved up 0.1% in June, following two consecutive monthly declines. Supply chain problems from the Japanese natural disaster led to a decline in auto production in each of the three months of the second quarter. Production at the nation's utilities rose 0.9% in June following a 2.0% drop in May.

Manufacturing output, which excludes utilities and mining components, rose 0.1% in June after holding steady in the prior month. (The manufacturing component accounts for roughly 85% of industrial production). Excluding autos, manufacturing production rose 0.1% in June, putting the annualized gain in the second quarter at only 1.5% compared with a 6.0% increase in the first quarter. This gain is the smallest for the eight quarters of the recovery underway. The operating rate of the nation's industries (74.4%) and factories (76.7%) held steady in June.

Paul Kasriel is the recipient of the 2006 Lawrence R. Klein Award for Blue Chip Forecasting Accuracy

by Paul Kasriel
The Northern Trust Company
Economic Research Department - Daily Global Commentary

Copyright © 2011 Paul Kasriel
Paul joined the economic research unit of The Northern Trust Company in 1986 as Vice President and Economist, being named Senior Vice President and Director of Economic Research in 2000. His economic and interest rate forecasts are used both internally and by clients. The accuracy of the Economic Research Department's forecasts has consistently been highly-ranked in the Blue Chip survey of about 50 forecasters over the years. To that point, Paul received the prestigious 2006 Lawrence R. Klein Award for having the most accurate economic forecast among the Blue Chip survey participants for the years 2002 through 2005.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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