After a streak of some lean economic data, the bulls were rewarded with a positive surprise in both the July industrial production and July capacity utilization numbers on Tuesday, both of which exceeded expectations and topped the June levels.
The chart below captures both measures of manufacturing activity going back to 1988 and shows that manufacturing appears to be continuing as one of the strengths of the recovery. While the chart captures monthly changes, it is important to point out that total industrial production in July was 7.7% above July 2009 levels, with utilities up 8.2% during the year, followed by 7.7% gains in manufacturing and a 7.5% advance in mining. Just as impressive, capacity utilization has increased in 12 of the past 13 months, gaining 0.7% in July after a flat June. (Click to enlarge)