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Economy in Brief

Industrial Production Increase Again Light
by Tom Moeller September 14, 2005

Industrial output in August rose 0.1% for the second consecutive month and fell short of Consensus expectations for a 0.3% increase. The disappointment centered on declines in utility output (-0.5%) and mining output (-0.7%). Factory sector production rose 0.3% (2.9% y/y) but the July increase was revised down to just 0.1%.

Hurricane Katrina lowered the gain in output by 0.3 percentage points.

A 3.8% (5.5% y/y) rise in motor vehicle & parts production accounted for all of last month's output gain. Less motor vehicles, factory output was unchanged (2.6% y/y) following an unrevised 0.3% July increase.

Output of computers & peripheral equipment jumped another 1.5% (19.4% y/y) after the huge 2.3% spike in July. Excluding the high tech sector as well as autos, factory output fell 0.1% (+1.6% y/y).

Output of appliances, furniture & carpeting rose 0.7% (1.0% y/y) and recovered a 0.8% drop in July although output of nondurable goods doubled the prior month's decline and fell 0.6% (+2.4% y/y). U.S. clothing output has fallen nearly two thirds from what is was ten years ago (-6.7% y/y) and, during the last three months, paper products' output is down as well (+3.4% y/y).

Total capacity utilization was stable at 79.8% and capacity grew 1.1% y/y. Factory sector utilization rose to 78.4%, up from 77.2% last August while capacity rose 1.4% y/y.

Pricing, Production and Persistence from the Federal Reserve Bank of Philadelphia can be found here.

Production & Capacity Aug July Y/Y 2004 2003 2002
Industrial Production 0.1% 0.1% 3.2% 4.1% -0.0% -0.3%
  Consumer Goods 0.4% -0.5% 2.4% 2.7% 0.3% 1.4%
  Business Equipment -0.2% 1.6% 8.0% 9.5% 1.2% -7.9%
Capacity Utilization 79.8% 79.8% 78.3% (8/04) 78.1% 75.5% 75.3%
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