Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Industrial Production Increased 0.4% in August
Posted Under: Autos • Data Watch • Inflation • COVID-19
Supporting Image for Blog Post

 
Implications:  Industrial production rose less than expected in August, largely the result of the late in the month plant shutdowns related to Hurricane Ida. In fact, the Federal Reserve estimates that without the storm-related headwinds, the overall index would have risen 0.7% for the month. Looking at the details, the disruptions were concentrated in manufacturing (petrochemicals, plastic resins, refining operations) and mining (oil and gas extraction) industries that have a large presence in the Gulf of Mexico. It's not a surprise then that mining was the weakest major category in August, falling 0.6%, its first decline in four months. Meanwhile, manufacturing output managed to eke out a gain of 0.2% despite the disruptions. The gain was driven by continued growth in auto production which rose 0.1% in August after a huge 9.5% gain in July.  Outside the auto sector, manufacturing rose 0.2% in August. Finally, utilities output rose 3.2% in August as unseasonably warm weather boosted demand for air conditioning.  Notably, the 0.4% gain in the headline index was enough to finally push that measure above its pre-pandemic high.  That said, it's important to keep in mind that despite hitting an important milestone, production still has a way to go to meet current demand. Ongoing issues with supply chains and labor shortages are hampering a more robust rise in activity, with job openings in the manufacturing sector currently at a record high and more than double pre-pandemic levels. We expect more temporary disruptions from Ida in September but a return to the upward trend in overall industrial production in the months after. It looks like the worst of Delta concerns are beginning to subside and labor disincentives are dissipating as well with the end of pandemic related unemployment payments. In other factory related news this morning, the Empire State Index, a measure of New York factory sentiment, soared to +34.3 in September from +18.3 in August. Finally, we also got trade inflation data this morning.  Import prices fell 0.3% in August while export prices increased 0.4%.  In the past year, import prices are up 9.0%, while export prices are up 16.8%.

Click here for a PDF version
Posted on Wednesday, September 15, 2021 @ 12:49 PM • 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.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.