Consumer sentiment - 10:00am

From the Wall Street Journal Consumer Sentiment Takes a Step Backward Consumer attitudes darkened in July, breaking a string of improved readings that had suggested households were regaining confidence in the economy. The Reuters/University of Michigan index of consumer sentiment, which was released Friday, sank to 66 from 70.8 in June, though it remained above the low of 55.3 recorded in November. Richard Curtin, the survey director, noted that most consumers "believe the economic free-fall is now over," but "see little reason to believe that the economic-stimulus package will improve their finances anytime soon." In July, the fewest consumers in the survey's 60-year history reported income gains, and respondents expected their incomes to rise just 0.2% on average in the next year. Buying plans for homes, autos and big-ticket household items declined as well. The drop in consumer sentiment echoes a decline in attitudes reported last month by the Conference Board, a New York business-research group. The index fell about five points to 49.3 in June after three consecutive gains. "The inescapable fact is that the U.S. consumer is faced with daunting fundamentals," said Joshua Shapiro, chief economist at New York-based MFR Inc.

Industrial Production and capacity utilization - 9:15am

Full report here INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION Industrial production increased 0.5 percent in July. Aside from a hurricane-related rebound in October 2008, the gain in July marked the first monthly increase since December 2007. Manufacturing output advanced 1.0 percent in July; most of the increase was due to a jump in motor vehicle assemblies from an annual rate of 4.1 million units in June to 5.9 million units in July. Excluding motor vehicles and parts, manufacturing production edged up 0.2 percent. The output of utilities fell 2.4 percent, reflecting unseasonably mild temperatures in July, and the output of mines increased 0.8 percent. At 96.0 percent of its 2002 average, total industrial production was 13.1 percent below its level of a year earlier. In July, the capacity utilization rate for total industry edged up to 68.5 percent, a level 12.4 percentage points below its 1972-2008 average. Market Groups The production of consumer goods rose 0.6 percent in July, as an increase of 7.4 percent in consumer durables more than offset a decrease of 0.9 percent in nondurable consumer goods. The output of consumer durables was boosted by a 17.4 percent increase in the production of automotive products. The indexes for home electronics and for appliances, furniture, and carpeting were little changed, while the index for miscellaneous goods increased 0.8 percent. The decline in nondurable consumer goods was led by a drop of 2.7 percent in the index for consumer energy products. Non-energy consumer nondurable goods declined 0.4 percent; the indexes for foods and tobacco and for chemical products decreased, while the indexes for clothing and for paper products edged up. The output of business equipment moved up 0.5 percent in July, the first increase for this category this year. The output of transit equipment increased 4.6 percent as a result of the sharp rise in motor vehicle output and a rise in the production of civilian aircraft. The index for industrial and other equipment decreased 0.5 percent, after having fallen at an average rate of 1.7 percent per month in the second quarter; the index for information processing equipment edged lower. The output of defense and space equipment rose 0.6 percent. Among nonindustrial supplies, the production of construction supplies edged down 0.1 percent in July, its third consecutive mild decline after sharp decreases over the previous nine months. The index of business supplies moved down 0.3 percent. Materials output rose 0.8 percent in July. A gain of 1.2 percent in the index for non-energy materials more than offset a decline of 0.3 percent in the index for energy materials. Within non-energy materials, the index for durable materials advanced 2.0 percent. Consumer parts rose sharply, led by a brisk advance in the output of motor vehicle parts; the indexes for equipment parts and for other durable materials also moved up. The production of nondurable materials gained 0.3 percent; the output of paper materials and of chemical materials increased, while the output of textile materials fell 2.7 percent. Industry Groups Manufacturing output increased 1.0 percent in July but remained 14.4 percent lower than its year-earlier level. The factory operating rate rose to 65.4 percent in July, 0.7 percentage point above the historical low recorded in June; the series begins in 1948. Production in durable goods industries advanced 2.2 percent in July. In addition to the sharp increase in motor vehicles and parts output, large production gains occurred for nonmetallic mineral products and for primary metals. The indexes for wood products, computer and electronic products, aerospace and miscellaneous transportation equipment, furniture and related products, and miscellaneous goods also rose. The indexes for fabricated metal products, machinery, and electrical equipment declined. The production of nondurable goods fell 0.1 percent in July. The indexes for textile and product mills and for printing and support recorded sizable declines; the indexes for food, beverages, and tobacco and for petroleum and coal products also declined. The output of paper, of chemicals, and of plastic and rubber products increased. The index for other manufacturing (non-NAICS), which consists of publishing and logging, was down 0.6 percent in July. The output of electric and gas utilities decreased 2.4 percent, and the operating rate for utilities dropped 2.1 percentage points, to 77.6 percent. Mining production moved up 0.8 percent; its utilization rate in July, at 81.7 percent, was 5.9 percentage points below its 1972-2008 average. Capacity utilization rates at industries grouped by stage of process were as follows: For the crude stage, utilization moved up 1.0 percentage point, to 78.8 percent, a rate 7.8 percentage points below its 1972-2008 average; for the primary and semifinished stages, utilization ticked down 0.1 percentage point, to 65.9 percent, a rate 16.1 percentage points below its long-run average; and for the finished stage, utilization moved up 0.8 percentage point, to 67.2 percent, a rate 10.5 percentage points below its long-run average. Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS. More at link with tables I cannot format.

Consumer price index report - 8:30am

Full report here The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.2 percent in July before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the last 12 months the index has fallen 2.1 percent, as a 28.1 percent decline in the energy index since its July 2008 peak has more than offset increases of 0.9 percent in the food index and 1.5 percent in the index for all items less food and energy. On a seasonally adjusted basis, the CPI-U was unchanged in July following a 0.7 percent increase in June. Small declines in the food and energy indexes offset a small increase in the index for all items less food and energy. The food index declined 0.3 percent in July with all six major grocery store food groups posting declines. The energy index, which rose 7.4 percent in June, fell 0.4 percent in July. Decreases in the indexes for gasoline, fuel oil, and electricity more than offset an increase in the index for natural gas. The index for all items less food and energy rose 0.1 percent in July following a 0.2 percent increase in June. The indexes for new vehicles, tobacco, medical care and apparel all continued to increase in July, and the index for airline fares turned up after a long series of declines. In contrast to these increases, the shelter index decreased in July as the index for lodging away from home fell and the indexes for rent and owners’ equivalent rent were unchanged. The food and beverages index, which rose 0.1 percent in June, fell 0.2 percent in July. The decrease was caused by the food at home index, which declined for the seventh time in the last eight months, falling 0.5 percent. All six major grocery store food group indexes fell, with the largest decreases being a 1.3 percent decline in the index for meats, poultry, fish and eggs and a 0.6 percent decline in the dairy and related products index, which has now fallen for eight months in a row. The cereals and bakery products index posted the smallest decrease of the six groups, falling 0.1 percent. The indexes for fruits and vegetables, for nonalcoholic beverages, and for other food at home all declined 0.3 percent in July. The food at home index has declined 2.6 percent from its peak in November 2008. In contrast to the decline in the food at home index, the food away from home index rose 0.1 percent in July and the index for alcoholic beverages increased 0.3 percent. The housing index fell 0.2 percent in July after being unchanged in June. The index for shelter fell 0.2 percent and the household energy index declined 0.3 percent. Within the shelter group, the indexes for rent and owners’ equivalent rent were both unchanged in July after rising 0.1 percent in June. The index for lodging away from home turned down in July, falling 2.1 percent after increasing 0.3 percent in June, and has fallen 8.9 percent over the past 12 months. Within household energy, a 0.9 percent increase in the index for natural gas was more than offset by declines in the other indexes, including a 0.6 percent decrease in the electricity index and a 1.5 percent fall in the fuel oil index. The index for household furnishings and operations, unchanged for each of the previous three months, declined 0.1 percent in July. For the past 12 months, the housing index has declined 0.7 percent, with the shelter index up 0.9 percent and the household energy index down 14.1 percent. After rising 4.2 percent in June, the transportation index increased 0.2 percent in July. Most of the moderation was due to the motor fuel index, which fell 0.4 percent in July after rising 17.2 percent in June. The new vehicle index increased 0.5 percent in July after rising 0.7 percent in June, and the index for used cars and trucks was unchanged in July after rising 0.9 percent in June. The public transportation index, however, turned up in July, rising 1.9 percent after declining 0.5 percent in June. The turnaround was mostly due to the index for airline fares, which rose 2.1 percent in July after declining in each of the previous ten months. Over the past 12 months, the transportation index has fallen 14.1 percent, with several of its components declining. The gasoline index fell 37.3 percent while the index for airline fares declined 16.6 percent and the index for used cars and trucks decreased 7.9 percent. However, the new vehicle index has risen 1.2 percent over the past 12 months. Among other CPI groups, the medical care index rose 0.2 percent in July, the same increase as in June. Within that group, the index for hospital and related services rose 0.7 percent while the index for prescription drugs was unchanged. Over the last 12 months, the medical care index has risen 3.2 percent. The index for other goods and services rose 0.8 percent in July after advancing 0.3 percent in June. The larger increase was driven by the tobacco index, which rose 2.2 percent as excise tax increases in several states went into effect in July. The tobacco index has now risen 27.8 percent over the past year. The apparel index advanced 0.6 percent in July after a 0.7 percent increase in June. The index for education and communication rose 0.3 percent in July after rising 0.2 percent in June, while the index for recreation was unchanged in July after rising 0.5 percent in June. More charts and info at link.