US industrial production was slightly higher in June on a seasonally-adjusted basis, but the year-over-year growth rate fell to a new “cycle” low. While the monthly measure was 0.33% above May, it was up only 1.54% over June 2014 following a Y/Y gain of just (revised) 1.62% last month. The 6-month average is again below 3% for the first time since 2013 and without a serious gain in July the average will likely also fall to a new cycle low.
The increase in apparent monthly variation (typical at points of inflection) led to some sharp revisions which actually had the effect of increasing monthly volatility in the estimates. Where IP was thought nearly flat (seasonally-adjusted) for 2015 so far, it still is except with now more ups and downs along the way. That would seem very much in accordance with industrial production and other economic accounts in places like China where monthly variation is often meaningless on its own, and here especially subject to significant revisions.
The trend in industrial production remains on the downswing, even though a good portion of the revisions for this year were in the crude oil sector. It still appears as if oil production might be slowing, but estimated production for particularly March and April were revised much higher and more in line with prior production gains; meaning that the expected crude production slowdown has yet to seriously materialize though it, yet again, may be starting to form.
Capacity utilization ticked up in June (and May was revised up by the smallest rounding), breaking a string of six monthly retreats. Utilization is almost a full percent below June 2014 and many industries have shown even sharper retrenchment (communications equipment capacity is at 73.6% vs. 75.8% a year ago; semiconductors at 63.4% vs. 72.4%). I