Today’s report from the Federal Reserve on Industrial Production for July [pdf] was rather lackluster, see a Reuters report here. Output at U.S. factories, mines and utilities was unchanged in July from June, and was up only 1.4% on a year-over-year basis. Overall manufacturing output in July at the nation’s factories increased only 1.3% from the same month last year, although durable manufacturing posted a year-over-year gain of 2% and motor vehicles and parts increased by 2.6%. Output at utilities fell by 3.7% from last July, while mining output increased 5.7%, and continued to be the bright spot in America’s industrial sector.
Among all of the individual industrial sectors, the strongest growth in output over the last few years has consistently been recorded by the “Oil and Gas Extraction” sector, thanks to the shale oil and gas boom, and July was no different. Oil and gas extraction led America’s industrial output again with the highest monthly increase (2.8%) and the highest annual gain of 10% of any individual sector in July, bringing oil and gas extraction activity in the U.S. to the highest level since the Federal Reserve started reporting sectoral output in 1972 (see chart above).
America’s energy sector continues to be at the forefront of America’s otherwise sub-par economic expansion. As Robert Samuelson commented last December, in The Washington Post, America’s shale revolution remains the “crown jewel of the disappointing economic recovery.” That observation is confirmed by today’s report on industrial production, and the record high level of activity recorded for oil and gas extraction in the U.S. for July