Industrial Production Advances in August
Federal Reserve chairman Ben Bernanke’s comment that the recession is “very likely over” was given additional credence this morning as Industrial Production beat forecasts and advanced 0.8% in August. Revisions to July doubled the previous estimate from 0.5% to a full percentage climb.
Annually, industrial production remains down 10.7%, but that’s quite an improvement from the -13.1% print in July. Forecasts were looking for an increase of 0.6%.
“The back to back gains in industrial production provide further evidence the recession ended around July,” commented Deutsche Bank economist Joseph LaVorgna.
Manufacturing added to a 1.4% gain in July with a 0.6% climb, including a 5.5% outpouring from motor vehicle & parts. Those gains were anticipated based on the success of the cash-for-clunkers incentive program, which also caused July’s motor vehicles number to by one-fifth (+20.1%).
Mining increased 0.5% to build on its 0.6% gain in July, though it remains 10.5% below levels seen in August 2008. Utilities shot up 1.9%, more than reversing the 1.6% cutback in July. From last year utilities are only down 0.1%.
Construction was flat but has not seen a negative figure since April. Since last year it remains down a whopping 18.5%, the worst of all components.
The output of consumer goods strengthened 1.3% in the month, with durable and nondurable goods each advancing.
The Capacity Utilization Rate is still showing large slack in the economy with a score of 69.6% in August, but it did move up slightly from a revised 69.0% reading in July.
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