Tags: Industrial | Output | Growth | Slows | economy

Industrial Output Growth Slows as Economy Cools Down

Wednesday, 15 Sep 2010 10:24 AM

Industrial output rose at a slower pace in August and a measure of New York state business conditions slipped to the lowest level in more than a year, according to data on Wednesday that suggested the economy was cooling but not stalling.

Industrial production rose 0.2 percent in August, matching economists' forecasts for a sharp slowdown from July when unusually strong auto manufacturing lifted output, Federal Reserve data showed. July's gain was revised down to 0.6 percent from 1 percent.

Excluding motor vehicles and parts, total industry output increased 0.4 percent in August, compared with July's 0.3 percent advance.

Separately, the New York Fed's "Empire State" general business conditions index slipped to 4.14 in September from 7.10 in August. September's reading marked the lowest since July 2009 and was below market expectations for 8.0.

Economists often look to the Empire State report as an early gauge of national output patterns because it is one of the first data points released each month.

Beneath the disappointing headline, however, some economists saw cause for optimism in higher readings on new orders and the average workweek.

"We see this report as consistent with our view that manufacturing has downshifted to a lower pace of growth but not stagnated," Barclays Capital economist Nicholas Tenev said.

Another report from the Labor Department showed import prices increased 0.6 percent after rising by a revised 0.1 percent in July. Analysts polled by Reuters had forecast import prices rising 0.3 percent last month from a previously reported 0.2 percent gain in July.

Markets largely ignored the reports, focusing instead on developments on the foreign exchange markets, where the U.S. dollar jumped from a 15-year low against the yen on Wednesday after Japan intervened to sell the yen for the first time in six years.

Analysts were still encouraged that the New York state manufacturing index had not dropped below zero, which would have signaled a contraction in factory activity.

"The Empire manufacturing index was slightly weaker-than-expected, but did not fall below the zero line, further diminishing concerns about a double dip," said Jonathan Basile, an economist at Credit Suisse in New York.

The survey showed employment continued to improve.

Although import prices rose sharply in August, the annual increase of 4.1 percent was the smallest advance since November.

August's monthly rise reflected a 2.1 percent rise in the price of imported petroleum and petroleum products, the largest since April, after a 0.9 percent increase in July. Excluding petroleum, import prices rose 0.2 percent, reversing the prior month's 0.2 percent decline.

Prices of imported foods jumped 2.2 percent from a 0.1 percent rise in July. There were also increases in prices for industrial supplies and materials.

The Labor Department report showed export prices rebounded 0.8 percent last month after slipping 0.2 percent in July. Export prices were boosted by a 4.3 percent jump in food prices, the biggest rise in 14 months.

Analysts had expected export prices to gain 0.2 percent. Compared to August last year, export prices rose 4.1 percent.

© 2017 Thomson/Reuters. All rights reserved.

 
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Industrial output rose at a slower pace in August and a measure of New York state business conditions slipped to the lowest level in more than a year, according to data on Wednesday that suggested the economy was cooling but not stalling. Industrial production rose 0.2...
Industrial,Output,Growth,Slows,economy
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2010-24-15
Wednesday, 15 Sep 2010 10:24 AM
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