US sees lukewarm industrial production in August: Fed
Sep 16, 2020 - 06:38 AM
WASHINGTON — US industrial production continued to recover from the Covid-19 downturn in August but its pace was slowed by bad weather and a pullback in car manufacturing, the Federal Reserve said Tuesday.
Production rose 0.4 percent last month, well below the 3.5 percent gain seen in July and 7.3 percent below its level in February, before the pandemic, the Fed said.
Hurricane Laura and Tropical Storm Marco brought temporary shutdowns to oil and gas production in the southern United States, causing mining production to fall 2.5 percent in the month.
Durable and non-durable manufacturing saw slowing growth compared to July, with motor vehicles and parts declining 3.7 percent.
All told, industrial production was 7.7 percent lower than August 2019, while capacity rose 0.3 points to 71.4 percent, slightly below expectations.
Manufacturing has been clawing back ground lost when business shutdowns to stop the spread of coronavirus began in mid-March, which saw industrial production sink by 12.9 percent in April before returning to positive territory in the months since.
“The rebound continues, but at a slowing pace,” Ian Shepherdson of Pantheon Macroeconomic said.
However he warned that business capital expenditures in the manufacturing sector have “been hit by the plunge in earnings and the extreme uncertainty, which mean that output is likely to remain below its pre-Covid peak for some time yet.”
Elsewhere in the data, clothing saw a massive jump of 8.1 percent after its 2.6 percent contraction in July, while utilities dropped 0.4 percent after gaining 3.8 percent the month prior.