Industrial Output in U.S. Falls for First Time Since January
Source: Bloomberg
By Shobhana Chandra Sep 15, 2014 10:03 AM ET
Industrial production in the U.S. unexpectedly declined in August for the first time in seven months as auto manufacturing cooled.
Output at factories, mines and utilities fell 0.1 percent after a 0.2 percent gain the prior month that was smaller than previously reported, figures from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey of 79 economists called for a 0.3 percent rise. Automakers scaled back following the biggest surge in almost five years.
Faster wage gains are needed, alongside improving payrolls and confidence, to trigger a more broad-based pickup in consumer spending that’ll bolster more manufacturers. At the same time, recent data -- including the strongest auto sales in eight years and improving business investment -- signal the slowdown will probably be short-lived.
“The story is mostly one of a big jump is auto production in July which was reversed in August, so we should look at the two months together,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York and the only economist surveyed to correctly forecast the drop in factory output. “When you do that, you have modest growth in manufacturing. Demand is fairly well balanced between consumer spending and business investment.”
Read more: http://www.bloomberg.com/news/2014-09-15/industrial-output-in-u-s-falls-for-first-time-in-seven-months.html