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.
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