Hot July temperatures drove strong growth in industrial production

Aug. 16:

The manufacturing component of Industrial Production was up a surprising 0.5% in July. The other two components, mining and utilities, were up 0.5% and 5.4%, respectively, resulting in a 1.0% increase in overall industrial production.

The large increase in utilities output, which is always somewhat volatile, was attributable to unusually hot weather. High temperatures also lifted indexes for energy consumer goods and energy materials.  

Capacity Utilization rose to 79.3% from 78.6% in June.

Housing starts rose 3.9% last month

Housing starts were up 3.9% in July due to a 6.7% increase in single-family starts. Multifamily starts were flat.

Overall building permits were up 0.1% in July. Single-family permits rose 0.6%, multifamily permits dropped 0.2% and permits for dwellings with two to four units were down 7.7%.

State of the market

The Dow traded up this morning, and there was a little steepening in the Treasury yield curve as we await minutes from the July 26 Federal Open Market Committee meeting expected later today.

Economic calendar

Wednesday, Aug. 16

• The Federal Reserve releases minutes from the July 26 FOMC meeting.

Thursday, Aug. 17

• Philadelphia Fed Manufacturing Business Outlook
• Weekly Initial Jobless Claims
• Leading Indicators

Treasury calendar

There are no auctions of Treasury notes or bonds this week.

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking