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Industrial output rises
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September 16, 1999: 10:57 a.m. ET
Autos help boost August production; utility demand drops with temperature
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NEW YORK (CNNfn) - A surge in production of automobiles and automotive parts accounted in large part for a faster-than-expected rise in U.S. industrial output in August, the Federal Reserve said Thursday.
Production at U.S. factories, mines and utilities increased 0.3 percent in August after a gain of 0.7 percent the previous month.
Economists polled by Reuters expected production to remain unchanged in August.
In the manufacturing sector, output advanced 0.4 percent, a slightly slower rate than in July. Excluding cars, trucks and automotive parts, output rose 0.2 percent, down from 0.7 percent in July.
Within that sector, the output for durable goods overall gained 0.7 percent as the production of light vehicles, computers and semiconductors increased.
Output of electric utilities, however, which had risen sharply in the early part of the summer due to high temperatures, fell 1.6 percent as the weather cooled to more normal levels.
In mining, output rose 0.6 percent following a 0.9 percent gain in July thanks in part to a recovery in oil and gas well drilling.
As for capacity utilization, companies ran at 80.8 percent of their maximum operating capacity in August, up from 80.7 percent in July and above the 80.4 percent forecast by economists. Capacity utilization was at its highest since a matching pace in November of last year.
Nevertheless the rate remained well below the 83 percent rate that some analysts regard as signaling an inflation risk because of supply problems.
"Capacity utilization was up one tenth and from an inflation perspective we still have ample capacity," Michael Moran, chief economist at Daiwa Securities America Inc., told Reuters.
Economists said the industrial output report was unlikely to weigh heavily on Federal Reserve policy-makers, who meet on Oct. 5 to decide the future direction of interest rates.
In other economic news released Thursday, the Labor Department reported that the number of first-time jobless claims slipped to 288,000 for the week ended Sept. 11, just above the 286,000 economists were expecting.
The benchmark 30-year U.S. Treasury bond was trading up 6/32 of a point in price for a yield of 6.09 percent soon after the release of the economic numbers.
-- from staff and wire reports
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Federal Reserve Board
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