Industrial production in line with expectations

Industrial production was in line with expectations in August, rising 0.2% (though July industrial production was downwardly revised to 0.6% from an initially reported 1.0%). Manufactured production also increased 0.2% in August.

BOTTOM LINE

The month-to-month growth rates in manufactured output in July and August were heavily distorted by shifting seasonal patterns in the summer auto retooling shutdowns. However, through this volatility, we see a slowing in the growth rate of manufactured output which likely reflects the reduced impetus to demand growth from inventories. Within the manufacturing data, however, we see continued robust growth in the production of business equipment and a sharp slowing in the growth of consumer goods output. These production trends reflect the patterns of final demand growth in the overall economy. Going forward, we expect continued growth in manufacturing activity although at a slower pace than we have seen over the last year.

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