- Manufacturing production increases by 0.2% in August
- Production inindustrial increases by 0.4%; Hurricane Ida Hurts Mining
- Import Prices Fall 0.3% in August; up 9.0% year on year
WASHINGTON, September 15 (Hfrance.fr) - Production in American factories has slowed down sharply in August as Hurricane Ida forced factories to close and a continuing shortage of microchips hampered motor vehicle production, but manufacturing remains strong amid meager inventories.
There was more new commodity on the inflation front. Import prices fell for the first time in 10 months in August, according to other data released on Wednesday. Persistent bottlenecks in the supply chain, however, could keep inflation high. Federal Reserve Chairman Jerome Powell has maintained that high inflation is transient.
"Future growth in the manufacturing sector will likely be supported by low inventories " said Rubeela Farooqi, chief US economist at High Frequency Economics in White Plains, New York. "But supply issues and shortages remain a constraint for now that prevent a stronger rebound.
Manufacturing output rose 0.2% last month after jumping 1.6%, the Fed said. The US central bank estimated that Hurricane Ida, which devastated US offshore energy production and cut power to Louisiana in late August, subtracted 0.2 percentage point from manufacturing output.
The hurricane shut down petrochemicals, plastic resins and petroleum refining plants. The economists interviewed by Hfrance.fr predicted that the production manufacturier would gain 0.4%.
The slowdown in closures was offset by strong gains in the production of computer and electronic products as well as furniture and products related. But the production of machinery has fallen, as has that of electrical equipment, devices and components, possibly due to shortages of raw materials, especially semiconductors.
The production of automobile factories increased slightly. 0.1% after jumping 9.5% in July when automakers ditched traditional summer plant closures for retooling as they adjusted their schedules to cope with chip shortages . The commodities crisis has been exacerbated by the latest wave of infections caused by the Delta variant of the coronavirus, mainly in Southeast Asia, as well as port congestion in China.
Auto production could drop in September. General Motors Co (GM.N) said it would cut output at its factories in Indiana, Missouri and Tennessee this month due to microchip shortages. Ford Motor Co (FN) also decreases truck manufacturing. Excluding automobiles, manufacturing output rose 0.2% in August after accelerating 1.1% in July.
Industrial production is higher by 1.0% to pre-pandemic level.
Rising manufacturing output and a 3.3% rebound in utilities while the unusually hot weather boosted air conditioning demand increased industrial production by 0.4%. Theindustrial production rose 0.8% in July.
Mining production fell 0.6%, reflecting the disruption caused by hurricanes in the 'oil and gas extraction in the Gulf of Mexico.
Shares on Wall Street rose. The dollar slipped against a basket of currencies. US Treasury prices were mixed.
INFLATION TAKES A BREATH
Capacity utilization for manufacturing, a measure of how companies are fully utilizing their resources, edged up 0.1 percentage point to 76.7% in August. Overall capacity use for the industrial sector rose 0.2 percentage point to 76.7% in August. 4%, or 3.2 percentage points below its average from 1972 to 2020.
Fed officials tend to look at measures of capacity utilization for signals how much slack is left in the economy - how much growthdoes it have room before it becomes inflationary.
Inflation appears to have peaked or is on the verge of achieve it.
A second report from the laboratory or Department showed that import prices fell 0.3% last month after increasing 0.4% in July. The first decline since October 2020 reduced the year-over-year increase to 9.0% from 10.3% in July.
The report follows Tuesday's news that prices at consumption recorded their smallest increase in seven months in August. read more
Imported fuel prices fell 2.3% last month after rising 3 .0% in July. Oil prices fell 2.4%, while the cost of imported food rose 0.6%.
Excluding fuel and food, import prices fell by 0.2%.so-called "core" imports gained 0.1% in July. The prices of imported capital and consumer goods, excluding automobiles, increased slightly.
"Inflation has taken a little breather in August, but the race or marathon is not yet over "said Jennifer Lee, senior economist at BMO Capital Markets in Toronto.
A third New York Fed report showed its " Empire State "index on current trading conditions jumped to 34.3 this month from 18.3 in August. A reading above zero suggests an expansion in regional business activity.
Companies in the region were very optimistic about improving business conditions in the over the next six months, with plans for capital and technology spending increasing dramatically.
But on the supply side challenges remained, the measure of delivery times reaching a record level.
While a measure of prices paid for intrants by enterprises in the regions fell, it remained very high levels. Manufacturers have said they have increased the prices of their products, with the gauge of prices received from the survey marking its third consecutive record h.
" businesses and consumers are not out of the woods yet, "said Ryan Sweet, senior economist at Moody 's Analytics in West Chester, Pennsylvania. "Nonetheless, we remain comfortable with our forecast for continued moderation in inflationary pressures, ignoring the temporary effect of the hurricane in September. Report by Lucia Mutikani; Editing by Andrea Ricci
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