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U.S. Industrial Production Falls 0.8 Percent in August
U.S. industrial production fell 0.8 percent in August, the 11th consecutive monthly decline, the Federal Reserve reported Friday.
The 0.8 percent drop in the industrial production came after a 0.1 percent decrease the month before. Economists had projected the industrial production would fall only 0.2 percent in August.
Year-on-year, industrial production in August was 4.8 percent below its level in August 2000.
Manufacturing output, which was unchanged in July, fell 1 percent in August and was 5.5 percent lower than in August 2000.
Manufacturing has been the part of the economy hardest hit by the more than yearlong slowdown in economic activity. The government said last week that the manufacturing lost 141,000 jobs in August, bringing the total jobs cuts to more than 1 million in the past year.
Output at mines fell 0.4 percent in August after a 1.1 percent decline in July. Production at utilities, however, increased 1.6 percent in August, compared with a 0.7 percent drop the month before.
The report said the declines in production left U.S. industry operating at just 76.2 percent of capacity in August, 0.7 percentage point lower than the 76.9 percent in July. That marked the weakest performance since July 1983.
Seeking to stave off a recession, the Fed has cut interest rates seven times this year, totaling 3 percentage points, driving down the borrowing costs to the lowest level in more than seven years.
Many analysts say the Fed is likely to cut rates again even before its next scheduled meeting on October 2.
In a separate report, the Commerce Department said Friday that retail sales rose 0.3 percent to a seasonally adjusted 293.1 billion U.S. dollars in August, reflecting the fact that consumer spending is still holding up.
The 0.3 percent rise in retail sales followed a 0.2 percent increase in July. Year-on-year, retail sales in August were up 3.5 percent.
The increase in retail sales was led by a 1.4 percent rise in sales at gasoline stations, a jump that in large part reflected higher pump prices. Sales at department stores rose by 0.4 percent while sales at restaurants and bars rose an even larger 1.2 percent.
Auto sales declined 0.2 percent in August, following a 0.6 percent increase in July. Excluding auto sales, retail sales rose 0.5 percent in August after being flat the month before.
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