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US industrial output dips in August on drop in electricity output

·1-min read

A drop in electric power generation and a modest uptick in manufacturing led to a small decline in overall US industrial production in August, the Federal Reserve said Thursday.

Total output slipped 0.2 percent, worse than economists expected, on the 2.3 percent drop in utilities, which was the second straight decline.

Manufacturing edged up 0.1 percent, while mining output was flat after five consecutive months of gains, the report said.

Rubeela Farooqi of High Frequency Economics noted the downside surprise in the data.

"Momentum in factory activity has slowed," she said. "Supply chain constraints and price pressures appear to be easing, which is a positive for manufacturing.

"But factory activity is likely to moderate in response to slowing demand amid a rising interest rate backdrop," she added.

Production of vehicles and parts fell 1.4 percent, and the big gain in July was cut in half after revisions, the data showed.

A 3.5 percent jump in petroleum output and a 2.1 percent increase in aerospace and other transportation equipment helped offset other losses, the report showed.

Overall industrial production is up 3.7 percent compared to August 2021, while manufacturing output is 3.3 percent higher, according to the figures.

Industrial capacity in use slipped to 80 percent, from 80.2 percent, in the prior month, the report said.

hs/sw