U.S. factory production rose in August amid broad-based gains that included automakers, providing support for economic growth this quarter, Federal Reserve data showed Friday.
Highlights of Industrial Production (August)
- Factory output rose 0.2% (est. 0.3% gain) after increasing an unrevised 0.3%.
- Total industrial production, which also includes mines and utilities, increased 0.4% (est. 0.3% rise) after an upwardly revised 0.4%.
- Capacity utilization, measuring the amount of a plant that is in use, ticked up to 78.1% (est. 78.2%) from 77.9%.
Key Takeaways
The data showed overall improvements in factory output, led by motor vehicles and parts, primary metals and machinery. Energy output rose at the fastest pace in four months, led by gains in consumer and commercial products.
The numbers are in line with other recent reports indicating strength among U.S. producers as demand continues at a solid clip. The Institute for Supply Management’s gauge found manufacturing jumped to the highest since 2004, with orders and production rallying.
Although overall manufacturing output missed economists’ estimates, levels are still elevated. The factory data also show resilience in the face of supply constraints, wage pressures, higher prices and supply-chain disruptions amid global trade uncertainty. At the same time, this year’s corporate tax cuts bode well for companies while a strong job market is encouraging household spending.
The factory-use rate of 75.8% is still 2.5 percentage points below its long-run average, the Fed said in the report.
The Fed’s monthly data are volatile and often get revised. Manufacturing, which makes up 75% of total industrial production, accounts for about 12% of the U.S. economy.
Other Details
- Utility output increased 1.2% after inching up 0.1 percent the prior month.
- Motor vehicles and parts rose 4% after a 1.4% drop the prior month.
- Excluding autos and parts, industrial output rose 0.2%.
- Mining production rose 0.7%, with oil and gas well drilling down 0.5%, the second consecutive drop.
- Production of consumer goods rose 0.3%, and output of business equipment grew 1.2%.
- Machinery rose 1.1%.
By Katia Dmitrieva
