Manufacturing Output Unchanged In August

Last month, U.S. factories took a summer vacation from growth.

Following two consecutive months of gains, U.S. manufacturing production was unchanged in August, as an increase in the production of durable goods was offset by a decrease in the production of non-durables, the Federal Reserve System reported on September 15. Factory output increased at a higher-than-initially-reported four-tenths percent in July - -and nine-tenths of a percentage point in June.

U.S. manufacturing ran at 81% of capacity in August, down two-tenths of a percentage pint from 81.2% in July. However, capacity utilization last month was 2.2 percentage points above that of August 2005

For the industrial sector of the U.S. economy, which includes mining and utilities in addition to manufacturing, output declined a tenth of a percentage point in August as utility output and mining production both declined. Capacity utilization for the industrial sector declined to 82.4% in August from 82.7% in July.

"These numbers are fully consistent with a decline in inflationary pressures in the months ahead," says Thomas J. Duesterberg, president and CEO of the Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group. If Chairman Ben Bernanke and the other voting members Federal Open Market Committee agree, they could leave the federal funds target rate unchanged at 5.25% at their meeting on Wednesday, September 20.

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