For the second straight month, U.S. industrial production jumped 0.8% in August, the Federal Reserve reported on Sept. 16, in a further sign of a reviving manufacturing sector.
Overall industrial output gained for a second month in August after eight consecutive monthly declines.
Manufacturing output increased 0.6% in August, helped in part by a jump in auto production. But the index excluding motor vehicles and parts increased 0.4%.
Total industrial production was 10.7% below its level of a year earlier, the Fed said.
The capacity utilization rate, a sign of slack in the industrial economy, rose to 69.6%, from a revised 69% in July. The August level is 11.3 percentage points below its average for the period 1972 through 2008.
"A general inventory swing and the Federal auto incentive program have kick-started the industrial recovery," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "The automotive 'Cash for Clunkers' program boosted sales at the time when automakers had already pared inventories, causing auto plants to reopen and quickly scale up production. Motor vehicle assemblies increased 43% in July and another 12% in August.
"Fortunately, the manufacturing rebound is relatively broad and not limited to autos as 12 of the 20 major manufacturing industries posted growth in August. Excluding motor vehicles and parts, manufacturing production increased 0.6% in July and 0.4% in August. We expect the improvement in manufacturing activity to continue as inventories are rebalanced and the current positive momentum builds on itself. Nevertheless, we only expect a modest pace of recovery in the general economy because of the headwinds of deleveraging, so the current fast pace of growth in manufacturing is likely to slow in the final months of the year."
Copyright Agence France-Presse, 2009