U.S. Industrial Production Unexpectedly Slumps Due To Harvey
September 15 2017 - 4:28AM
RTTF2
With Hurricane Harvey negatively impacting output, the Federal
Reserve released a report on Friday unexpectedly showing a notable
decline in U.S. industrial production in the month of August.
The report said industrial production slumped by 0.9 percent in
August after climbing by an upwardly revised 0.4 percent in
July.
Economists had expected production to inch up by 0.1 percent
compared to the 0.2 percent uptick originally reported for the
previous month.
The Fed said Hurricane Harvey is estimated to have reduced the
rate of change in total output by roughly three-quarters of a
percentage point.
Utilities output plunged by 5.5 percent in August after surging
up by 1.5 percent in July, as unseasonably mild temperatures,
particularly on the East Coast, reduced the demand for air
conditioning.
The report said mining output also fell by 0.8 percent in August
following a 1.3 percent jump in July, with Harvey temporarily
curtailing drilling, servicing, and extraction activity for oil and
natural gas.
Manufacturing output also dipped by 0.3 percent in August after
coming in unchanged in the previous month.
The Fed said storm-related effects appear to have reduced the
rate of change in factory output by about three-quarters of a
percentage point.
The manufacturing industries with the largest estimated
storm-related effects were petroleum refining, organic chemicals,
and plastics materials and resins.
The report also said capacity utilization for the industrial
sector slid to 76.1 percent in August from 76.9 percent in
July.
Capacity utilization in the utilities sector tumbled to 73.9
percent, while capacity utilization in the mining and manufacturing
sectors dipped to 83.9 percent and 75.3 percent, respectively.
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