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  Industrial Production Declined 0.9% in August
Posted Under: Data Watch • Industrial Production - Cap Utilization
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Implications:  Following six straight monthly gains, industrial production in August declined the most for any month since 2009.  However, the overall 0.9% decline was mostly due to Hurricane Harvey, with the Federal Reserve saying the storm reduced both overall production and manufacturing in particular by roughly 0.75%.  The other big negative in today's report was for utilities, which fell 5.4%, primarily due to mild temperatures reducing demand for air-conditioning on the East Coast.  Excluding these effects – Harvey and mild temperatures in the East –industrial production would have been up close to 0.5% in August, which is consistent with the 1.6% gain in the past year.  Remarkably, auto production rose 2.2% in August.  Look for a bounce in overall production in the months ahead once the effects of Hurricane Irma also filter through the data and weather patterns return to normal.  In the meantime, it'll be a rocky ride.  Take mining, which fell 0.8% in August, held back by drilling and well service activity.  Harvey knocked oil and gas-well drilling down 4.7% in August, although it's still up a massive 86% from a year ago.  Look for a bounce back in drilling activity in the months ahead once the effects of the storms pass.  In other news this morning, the Empire State index, a measure of manufacturing sentiment in New York, fell to a still very high 24.4 in September from 25.2 in August, showing continued strength in the factory sector. 

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Posted on Friday, September 15, 2017 @ 11:58 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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