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Economy in Brief

U.S. Industrial Production Reduced by Hurricane Harvey
by Tom Moeller  September 15, 2017

The Federal Reserve indicated that storm damage curtailed the change in total industrial production, as well as the change in factory sector activity, by roughly 3/4 percentage point during August. Industrial production declined 0.9% last month (+1.6% y/y) following a 0.4% July gain, revised from 0.2%. A 0.2% increase had been expected in the Action Economics Forecast Survey. Factory output fell 0.3% (+1.5% y/y) following no change in July, revised from -0.1%. Mining production eased 0.8% (+9.6% y/y) after a 1.5% increase.

The decline in factory sector production occurred as consumer products production fell 0.7% (-0.3% y/y). Nondurable goods output declined 1.1% (-0.1% y/y). Clothing output was off 2.5% (-8.6% y/y) after a 1.4% rise, while chemical products production rose 0.3% (1.7% y/y) following a 1.6% gain. Paper products production eased 0.2% (+0.6% y/y). Production of durable consumer products rose 0.8% (-0.8% y/y) as motor vehicle & parts production improved 2.2% (-3.5% y/y), up after three months of decline. Appliance and furniture output fell 0.9% (+0.6% y/y), down for the third month in four, but computer, video & audio product production rose 0.9% (1.3% y/y) following three months of decline. Business equipment production fell 0.4% (+1.9% y/y), down for the fourth straight month. Transit equipment output gained 0.5% (-1.9% y/y) after a 2.1% drop as production of information processing equipment rose 0.4% (2.6% y/y) following a 0.3% easing. Construction supplies production fell 0.5% (+2.9% y/y), down for the third month in the last four.

Materials production dropped 1.1% (+2.4% y/y) reflecting a 2.0% fall in energy materials output (+3.1% y/y) that reversed July's increase. Nondurable consumer goods materials output dropped 2.0% (+1.8% y/y) but durable materials production rose 0.5% (1.8% y/y).

In the aggregate groupings, selected high-technology product production increased 1.4% (3.4% y/y), raised by a 1.9% rebound (11.1% y/y) in computer & peripherals production. Communication equipment production eased 0.1% (-0.9% y/y). Factory production excluding both motor vehicles and high-tech products fell 0.6% (+1.8% y/y) after a 0.4% rise.

Capacity utilization declined to 76.1%, but was still up from 75.8% last August. Factory sector utilization declined m/m to 75.3% though it was up y/y from 74.7%. Factory sector capacity rose 0.7%, while excluding the high-tech sector, it gained 0.4% y/y.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figure is in the AS1REPNA database.

Industrial Production (SA, % Change) Aug Jul Jun Aug Y/Y 2016 2015 2014
Total Output -0.9 0.4 0.2 1.6 -1.2 -0.7 3.1
Manufacturing -0.3 0.0 0.2 1.5 -0.0 0.1 1.2
    Consumer Goods -0.7 0.3 -0.3 -0.3 0.6 2.3 0.8
    Business Equipment -0.4 -0.5 -0.4 1.9 -1.8 -0.9 1.9
    Construction Supplies -0.6 0.0 -0.3 2.9 1.3 0.5 3.4
  Materials -1.1 0.6 0.6 2.4 -2.3 -1.4 5.1
Utilities -5.5 1.5 -1.0 -7.8 -0.3 -0.7 1.4
Mining -0.8 1.3 1.2 9.6 -9.1 -4.3 10.7
Capacity Utilization (%) 76.1 76.9 76.7 75.8 75.7 76.8 78.6
 Manufacturing 75.3 75.6 75.6 74.7 75.1 75.5 75.4
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