June’s Industrial Production figures again provide mixed messages on the progress of the economic recovery. IP overall was essentially unchanged from May with a 0.2% increase.

On the Manufacturing side, overall there was no change from May. The important automobile segment recorded a 2.0% decrease, mainly due to continued component shortages from Japan. Increased days’ supply of certain models and early seasonal slowdowns may also have played a role. This drop builds on last month’s revised 1.5% decrease for that sector. If we exclude auto manufacturing, the data shows a 0.2% increase, suggesting auto production had a larger impact on Manufacturing this month.

Most consumer-oriented segments such as furniture and electronics were down between 0-2%, while industry-oriented segments such as primary and fabricated metals rose enough to compensate for these decreases.

The main takeaway here is the Japan disaster continues to affect Manufacturing, with consumer confidence potentially playing a growing role. On the bright side, we can be confident that parts shortages will be alleviated over the next few months as Japanese sources return to full production. Consumer confidence is more of a wild card, with unemployment the big problem there. An examination of the factors at work here is beyond the scope of this blog, but resolution of domestic issues such as the debt limit ceiling combined with some certainty that the European debt crisis is manageable would go a long way towards encouraging companies to hire.

This is what the recovery from the most serious economic crisis since the Great Depression looks like.