Industrial Production Rose in August
14 September 2018 - 3:45PM
Dow Jones News
By Sharon Nunn and Eric Morath
WASHINGTON--U.S. industrial output rose for the third month in a
row in August, largely because of strong utility and motor-vehicle
production.
Industrial production, a measure of factory, mining and utility
output, grew a seasonally adjusted 0.4% in August from the prior
month, the Federal Reserve said Friday. Economists surveyed by The
Wall Street Journal had expected a 0.3% gain for August. Industrial
output has risen steadily throughout the summer months.
Robust 1.2% production growth in the utilities sector helped
push last month's overall output gain, with electricity production
increasing at a solid pace from pullback seen earlier in the summer
months.
Meanwhile, output at factories increased a modest 0.2%, but
largely because of motor vehicle and parts production. If ones
removes that from the measure, manufacturing output was unchanged
in August. Mining production continued to increase steadily at
0.7%. Output in the category has grown each month since
January.
In the longer term, industrial production rose 4.9% in August
from the prior year. That is running ahead of broader economic
output growth this year.
Capacity utilization, which reflects how much industries are
producing compared with what they could potentially produce,
increased by 0.2 percentage point to 78.1% in August. Economists
had expected 78.2%.
Overall industrial production in July was revised up to a 0.4%
gain from a pervious estimate of up 0.1%. Capacity utilization for
the month was revised down to 77.9% from a first estimate of
78.1%
Manufacturing production has been rising since mid-2016, when
rising oil prices helped reverse a hit to U.S. energy production.
The manufacturing sector was hit hard by the 2007-09 recession and
later by a big drop in oil prices, which hurt energy production.
More broadly, it has been buffeted by years of competition from
low-cost countries such as China.
"While there have been increased signs of slowing external
growth, strong domestic demand will likely remain supportive for
industrial activity expansion," Lewis Alexander, chief U.S.
economist at Nomura, said prior to the report.
The Federal Reserve's latest report on industrial production and
capacity utilization can be accessed at:
https://www.federalreserve.gov/releases/g17/Current/
Write to Sharon Nunn at sharon.nunn@wsj.com and Eric Morath at
eric.morath@wsj.com.
(END) Dow Jones Newswires
September 14, 2018 09:30 ET (13:30 GMT)
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