U.S. industrial production increases in line with forecasts in August

The Federal Reserve reported on Wednesday the U.S. industrial production increased 0.4 percent m-o-m in August, following a revised 0.8 percent m-o-m growth in July (originally a 0.9 percent m-o-m jump).

Economists had forecast industrial production would increase 0.4 percent m-o-m in August.

According to the report, late-month shutdowns related to Hurricane Ida held down the advance in industrial production by an estimated 0.3 percentage point. Although the hurricane forced plant closures for petrochemicals, plastic resins, and petroleum refining, overall manufacturing output rose 0.2 percent m-o-m. At the same time, mining production declined 0.6 percent m-o-m, reflecting hurricane-induced disruptions to oil and gas extraction in the Gulf of Mexico. Elsewhere, the output of utilities climbed 3.3 percent m-o-m, as unseasonably warm temperatures boosted demand for air conditioning.

Capacity utilization for the industrial sector rose 0.2 percentage point m-o-m to 76.4 percent in August. That was in line with economists’ forecast but 3.2 percentage points below its long-run (1972-2020) average.

In y-o-y terms, the industrial output surged 5.9 percent in August, following an unrevised 6.6 percent increase in the prior month. This was the smallest annual increase in industrial production since March.