September 15, 2022 | 10:19
Firm Factory Production... For Now
U.S. industrial production unexpectedly slipped 0.2% in August, marking the first decline in three months. Still, manufacturing output (approx. 75% of industrial production) edged up 0.1% as supply bottlenecks and input costs eased. Machinery rose 1.0% while computer and electronic products jumped 1.3% to match a record high even as motor vehicles and parts dropped 1.4%.
Meantime, mining remained unchanged, holding at the highest level since March 2020 amid sturdy energy production, while volatile utilities fell 2.3% on lower electricity demand. Capacity utilization dipped 0.2 ppts to 80.0%, though still remains above the pre-pandemic rate.
Bottom Line: While total industrial production fell in August, factory output climbed for the second straight month amid strong business investment. Looking ahead… though manufacturing activity has remained a bright spot within a dimming economic outlook, momentum is expected to slow amid rising inventories and fading domestic demand.