Industrial Production Advances in August

by devteam September 16th, 2009 | Share

Federal Reserve chairman Ben Bernanke’s comment that the recession is “very likely over” was given additional credence this morning as Industrial Production beat forecasts and advanced 0.8% in August. Revisions to July doubled the previous estimate from 0.5% to a full percentage climb.

Annually, industrial production remains down 10.7%, but that’s quite an improvement from the -13.1% print in July. Forecasts were looking for an increase of 0.6%.

“The back to back gains in industrial production provide further evidence the recession ended around July,” commented Deutsche Bank economist Joseph LaVorgna.

Manufacturing added to a 1.4% gain in July with a 0.6% climb, including a 5.5% outpouring from motor vehicle & parts. Those gains were anticipated based on the success of the cash-for-clunkers incentive program, which also caused July’s motor vehicles number to by one-fifth (+20.1%).

Mining increased 0.5% to build on its 0.6% gain in July, though it remains 10.5% below levels seen in August 2008. Utilities shot up 1.9%, more than reversing the 1.6% cutback in July. From last year utilities are only down 0.1%.

Construction was flat but has not seen a negative figure since April. Since last year it remains down a whopping 18.5%, the worst of all components.

The output of consumer goods strengthened 1.3% in the month, with durable and nondurable goods each advancing.

The Capacity Utilization Rate is still showing large slack in the economy with a score of 69.6% in August, but it did move up slightly from a revised 69.0% reading in July.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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