Preview: Due August 18 - U.S. July Industrial Production - Modest manufacturing gain, stronger overall
We expect a 0.4% increase in July industrial production to follow two straight gains of 0.1%. For manufacturing we expect an increase of 0.2%, also improved from a flat June and a 0.1% increase in May.
We expect positive contributions of around 0.1% from both utilities, supported by hot weather, and mining, where non-farm payrolls showed an increase in aggregate hours worked.
July’s non-farm payroll showed aggregate manufacturing hours worked unchanged though we expect productivity gains will allow a modest increase in manufacturing output, which is implied by survey evidence such as the ISM’s. We expect a neutral contribution from autos, though this sector carries added uncertainty in July with annual retooling shutdowns complicating the seasonal adjustments.
We expect capacity utilization to rise to 76.4% overall after three straight months at 76.1%, and this would be the highest since a matching July 2025. For manufacturing we expect capacity utilization to be unchanged at 75.7%. The picture here is fairly steady.
