Industrial growth slowed in August
(Photo Credit: Susana Gonzalez/Bloomberg)
By Neil Irwin
The pace of growth in the industrial sector slowed in August, according to new data -- the latest sign of a recovery that is decelerating.
Industrial production rose 0.2 percent last month, compared with a revised 0.6 percent in July, the Federal Reserve said Wednesday. The Fed had earlier estimated that output by the industrial sector rose 1 percent in July.
The slowdown was caused in large part by cutbacks in auto production; output in that sector fell 5.2 percent, the Fed said. Also, production of appliances, furniture, and carpeting fell 2.1 percent, reflecting a slowdown in home sales activity.
The August number was in line with analysts' expectations and consistent with the view that the economic expansion has shifted into a period of tepid growth. Forecasters expect overall growth in the third quarter, which ends Sept. 30, to be below 2 percent at an annual rate, which would be too weak to bring down the jobless number.
Still, the modest growth in industrial production was evidence that the economy is not dipping into a new recession, or extended period of contraction. Capacity utilization in the nation's industrial sector edged up to 74.7 percent, from 74.6 percent
The manufacturing sector increased output at 0.2 percent, while output rose 1.2 percent in the mining sector and fell 1.5 percent for utilities.
| September 15, 2010; 9:40 AM ET
Categories: Auto industry, Federal Reserve, U.S. Economy
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