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US Industrial Production Stalls

James Boston
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US Industrial Production Stalls

The US has this morning been presented with an update to the strength of it’s Industrial sector following the publication of key manufacturing and industrial production figures for the month of August. The headline is the month on month Industrial Production figure which has been announced at a slight fall of -0.1%, this follows July’s 0.4% increase and a market consensus estimate for an increase of 0.25% to be reported today. The year on year industrial production number is now at 4.1%, by comparison July’s number was 5% and the anticipated figure today was 4.87%.

Capacity Utilization is now running at 78.8% according to the Federal Reserve Board, this compares to a July utilization of 79.3% and an expectation for this to fall slightly to 79.2% today.

The manufacturing component of the Industrial Production data has been revealed in the simultaneous Manufacturing Production data release. This area of the economy shrank by -0.4% in August when measured month on month, this follows a July reading of 0.3% and a market consensus estimate of 1.0% growth in August. Year on year the Manufacturing Production statistic now stands at 3.6% compared to a prior month’s reading of 4.9% and a consensus estimate for an announcement closer to 3.1% for this latest reading.

Finally, a more up to date clue to the state of the US manufacturing sector comes in the form of the September NY Empire State Manufacturing Index, this metric published by the Federal Reserve Bank of New York is currently showing at 27.54, for comparison the August reading was 16.0 and there was an expectation for this month’s number to drop to 14.7.

The Federal Reserve meets on Wednesday of this week to update monetary policy, no change is expected but there has been a lot of debate recently around the what metrics should be used to determine the correct time to raise rates, the policy statement will be watched closely for any guidance on this.

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