Industrial Production Lifted By Mining And Utilities

Strength in mining and utilities offsets softness in manufacturing to lift industrial production 0.4 percent higher in August. Mining volumes rose 0.7 percent with July now revised sharply higher to also a 0.7 percent gain. Output at utilities jumped 1.2 percent with the prior month also revised higher. Not revised higher, however, is the key manufacturing reading which holds at a moderate 0.3 percent gain in July that was not matched in August which managed only a 0.2 percent and lower-than-expected rise.

Auto production was actually strong in August, up 4.0 percent in the month but was unable to hold up manufacturing as a whole as nonindustrial supplies including construction supplies remained flat. But output of hi-tech goods and also business equipment were nevertheless solid in the month.

The subdued performance of manufacturing echoes the Fed's Beige Book earlier in the week which described the sector as no better than moderate. This is quite a surprise given extraordinarily strong readings in many of the small sample reports especially the ISM. Yet mining is definitely strong and together with even moderate acceleration for manufacturing point to a solid year-end contribution from the industrial economy.

Note that traditional non-NAICS numbers for industrial production may differ marginally from NAICS basis figures.