The numbers: Industrial production rose 0.4% in August, the Federal Reserve reported Friday.
The gain was above expectations of a 0.2% gain, according to a survey by the Wall Street Journal.
Capacity utilization rose to 79.7% in August from 79.5% in the prior month.
The capacity-utilization rate reflects the limits to operating the nation’s factories, mines and utilities.
Economists had forecast a 79.3% rate.
Key details: Manufacturing inched up 0.1% in August, following a 0.4% gain in the prior month. The gain was held back by a 5% drop in the output of motor vehicles and parts. Excluding automobiles, factory output rose 0.6%.
Mining output, which includes oil and natural gas, jumped 1.4% in August. The gain was primarily due to an increase of over 3% in the index for oil and gas extraction.
Utilities output rose 0.9% in August, after a sharp 4.4% gain in the prior month, as record-high summer temperatures cooled a bit.
Big picture: A strike by the United Auto Workers could put a dent in industrial output. Factory activity has also been hit by higher interest rates and a weak global outlook.
What are they saying? “Higher borrowing costs and weaker demand for goods are headwinds for manufacturing. However, a stabilization in demand at lower levels coupled with onshoring and infrastructure spending could be positive for factory activity over coming months,” said Rubeela Farooqui, chief U.S. economist at High Frequency Economics.
Market reaction: Stocks DJIA SPX opened lower on Friday while the 10-year Treasury yield BX:TMUBMUSD10Y rose to 4.32%.
This article was originally published by Marketwatch.com. Read the original article here.
