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Industrial output strong
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September 16, 1997: 9:47 a.m. ET
Federal Reserve August figures show industrial production rose 0.7 percent
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NEW YORK (CNNfn) - Industrial production showed surprising strength in August, counterbalancing other positive economic news Tuesday.
The U.S. Federal Reserve said industrial production, which measures production by the nation's factories, mines and utilities, pushed 0.7 percent higher last month, beating expectations of a 0.6 percent rise. It was the largest gain for output since a 0.8 percent increase in November 1996.
The capacity utilization rate scored its highest figure in two years, rising to 83.9 percent in August. Economists had expected a more moderate figure of 83.3 percent.
Matthew Alexy, strategist at CS First Boston, looked for the numbers, which went against Tuesday's positive consumer price index and business inventories numbers, to have a dampening effect.
"The market will probably trade off a little bit," said Alexy. He added that the numbers probably won't alter the immediate and long-term moderate inflation outlook.
The rise in production was centered in manufacturing, which was boosted by a 10 percent jump in automobile and light truck assembly. Auto assembly tends to decline in the early summer as companies retool their plants, and then rebounds afterwards.
Mining output fell 0.9 percent in August, held back by a large drop in coal mining, the Federal Reserve said.
Utility output declined 1.1 percent, hurt by lower electricity generation and sales.
-- Randy Schultz
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U.S. Federal Reserve
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