Manufacturing Activity Plummets in April

Industrial production sank 11.2 percent in April, following a 4.5 percent drop in March. The April fall is the fourth drop in five months and the largest monthly decline on record. Over the past year, industrial production is down 15.0 percent and is at the lowest level since March 2010 (see chart). Total capacity utilization decreased 8.3 percentage points to 64.9 percent, the lowest on record since 1950 (see chart).

Manufacturing output, which accounts for about 75 percent of total industrial production, fell 13.7 percent after sinking 5.5 in March. Manufacturing output has been flat or down for four consecutive months, resulting in an 18.0 percent drop over the past year (see chart). Manufacturing utilization fell 9.7 percentage points to 61.1, also the lowest on record since 1950 (see chart). Manufacturing-sector weakness was widespread with every category showing a decline.

Mining output posted a 6.1 percent decline for the month while utilities output dropped 0.9 percent in April. Over the past year, mining output is down 7.5 percent while utilities output is down 3.8 percent.

Measured by market segment, consumer-goods production was down 11.7 percent in April, with consumer durables off 36.0 percent and consumer nondurables down 5.5 percent. Business-equipment production fell 17.3 percent in April while construction supplies decreased 12.6 percent for the month. Materials production (about 46 percent of output) decreased 9.9 percent for the month and is down 12.8 percent from a year ago.

The tsunami of disastrous economic data continues. Lockdowns have pummeled economic activity, the labor market, and consumer attitudes. While some areas are moving towards easing restrictions, much damage has been done to the economy. It will likely be a slower path back than there was going in.

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