Industrial Production Rises 0.4% in August

The Federal Reserve reported that industrial production rose by 0.4% last month. That’s the biggest increase in six months. This data series has been quietly weak the last few months. Wall Street had been expecting a rise of 0.5%. Fortunately, this small miss isn’t enough to quell the Larry Rally.

Output at factories, mines and utilities climbed 0.4 percent after no change the prior month, a report from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey of 85 economists called for a 0.5 percent advance in August. Manufacturing, which makes up 75 percent of total production, advanced by the most this year.

The strongest vehicle sales in almost six years are propelling factory activity, encouraging companies such as Ford Motor Co. (F) to boost plant capacity. A pickup in global markets and stronger consumer demand would help spark further progress in the sector that struggled earlier this year.

“Companies have to increase production in order to keep up with demand,” said Brett Ryan, a U.S. economist at Deutsche Bank Securities Inc. in New York, whose firm is the second-best forecaster of production for the past two years, according to data compiled by Bloomberg. “You have an elevated level of unfilled orders, so that bodes well for production.”

fredgraph09162013

Posted by on September 16th, 2013 at 11:27 am


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