We got the latest Fed Industrial production indexes.
Good news! Industrial production climbed +0.4% in July.
That's a sixth consecutive monthly gain.
At 104.4% of its 2007 average, total industrial production in July
was +5.0% above its year-earlier level. That's a decent
annual rate of advance. Big U.S. companies can grow top lines
annually at a similar rate.
Capacity utilization for total industry edged up 0.1% to 79.2% in
July. That ratio is 1.7 points above its level of a year
earlier and 0.9 points below its long-run (1972-2013)
Staying below that key 80% level overall should keep any inflation
hawks at bay.
The Cyclical Story
A boom in cyclical auto spending drove the biggest increase in July
monthly numbers. Looks like consumers hit auto showrooms hard this
summer. Manufacturing output advanced +1.0% in July, its
largest increase since February. Production of motor vehicles and
parts jumped +10.1%. The rest of the manufacturing sector
Output of utilities dropped -3.4%. Weather was milder than
usual for July. That reduced air conditioning demand.
The Structural Story
The biggest structural story across 2014 remains oil and gas.
In July, production at mines moved up +0.3%, its ninth consecutive
monthly increase. It's all oil & gas.
In 2014, the U.S. mining sub-index has made a big move…
Mining Index in 2014
Jan - 122.9
Feb - 123.0
March - 125.0
April - 127.7
May - 128.4
June - 130.1
July - 130.5
Six-month mining change 130.5 - 122.9 = 7.6%
Mining, on the back of oil & gas fracking, has made a +8.6%
Oil & gas is the leading entire structural growth story.
My RTI Question: What's Your Favorite U.S. Energy
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
SPDR-SP 500 TR (SPY): ETF Research Reports
NASDAQ-100 SHRS (QQQ): ETF Research Reports
SPDR-DJ IND AVG (DIA): ETF Research Reports
To read this article on Zacks.com click here.