Gains in U.S. Factory Production Slowed in August, Fed Says By Bloomberg

Gains in U.S. Factory Production Slowed in August, Fed Says


Gains in U.S. Factory Production Slowed in August, Fed Says

(Bloomberg) — U.S. manufacturing production rose in August by less than forecast, signaling a more moderate pace of progress for factories as the economy recovers from pandemic-related shutdowns earlier this year.

Output at factories increased 1% from the prior month after an upwardly revised 3.9% gain in July, Federal Reserve data showed Tuesday. The median projection in a Bloomberg survey of economists was for a 1.3% rise. Manufacturing capacity utilization increased to 70.2%.

Total industrial production, which also includes mining and utility output, rose 0.4% in August after an upwardly revised 3.5% advance a month earlier. Mining was restrained by a temporary decline in oil and gas extraction related to tropical storms along the Gulf Coast.

While industrial output in the previous two months posted the sharpest gains since 1959, the burst of production is tapering off as the Fed’s index remains well below pre-lockdown levels. Nonetheless, manufacturing will continue to benefit from lean inventories, steady domestic sales and a pickup in overseas demand.

The Fed’s report showed that total capacity utilization, including factories, mines and utilities, edged up to 71.4% from July’s 71.1%. Still, the plant-use rate is well below the 76.9% seen in February. Unused capacity weighs on corporate profits because capital is underutilized. It also signals that business investment in new equipment will remain depressed, which could weigh on economic growth. Further, employment in the manufacturing sector remains far below pre-pandemic levels.

Production of motor vehicles and parts dropped 3.7% after sharp advances in the prior three months, while factory output excluding auto production increased 1.4% after a 1.9% increase. Utility output dropped 0.4% in August.

Mining output dropped 2.5% as oil and gas well drilling decreased 1.2% after an 8% decline a month earlier. Drilling has plummeted 71% from a year earlier after weaker oil prices prompted exploration and production companies to slash projects.

In a separate report Tuesday, manufacturing in New York state expanded in September at the second-fastest pace since 2018, indicating more momentum for the industry.

©2020 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link

Bloomberg


Leave a Reply

Your email address will not be published. Required fields are marked *


About us

InvestLab is a financial services technology company focused on the global trading market. Founded in 2010 in Hong Kong, the company develops trading, market data, and social research products that enable individual investors and small to mid-size brokers to access global markets. We provide brokers and financial institutions cross border capabilities for retail investors into 43 markets globally.


CONTACT US

CALL US ANYTIME