Industrial Production Rebounds After Hurricane-Related Drop
After a 0.9% decline in July, production at U.S. factories, mines, and utilities increased 0.8% in August, exceeding expectations.
U.S. industrial production rebounded in August from a Hurricane Beryl–related slide a month earlier, reflecting a pickup in manufacturing and mining output.
The 0.8 percent increase in production at factories, mines, and utilities followed a downwardly revised 0.9 percent decline a month earlier, Federal Reserve data showed Tuesday. The August advance exceeded all estimates in a Bloomberg survey of economists.
Manufacturing production rose 0.9 percent. Mining and energy extraction also increased, while output at utilities was unchanged in August. A month earlier the hurricane led to power outages and temporary closures at some producers in Texas, disrupting natural gas extraction, according to the Fed.
Despite the pickup in factory output, manufacturing remains lackluster as high borrowing costs restrain capital spending and limit consumer demand for big-ticket items. Export demand remains subdued as well. However, Fed officials are expected to take the first step tomorrow to ease monetary policy as inflationary pressures subside.
Manufacturing, which accounts for three-fourths of total industrial production, was boosted by increased motor vehicle output. Excluding auto output, factory production increased 0.3 percent in August after falling in the prior two months.
The Fed’s data showed rebounds in output of consumer goods, business equipment, and construction supplies.
Meanwhile, capacity utilization at factories, a measure of potential output being used, rose to 77.2 percent from 76.6 percent. The overall industrial utilization rate increased to 78 percent.
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