A new report from the Federal Reserve shows that US factory output expanded in August, albeit at a much slower pace than in July, with disruptions related to Hurricane Ida to blame for a relatively weak print. Nevertheless, overall industrial output rose above its pre-pandemic level in August.
After rising 0.8 percent in July, total US industrial output increased by 0.4 percent in August, the Fed said in a September 15 release (PDF).
“The late shutdown related to Hurricane Ida resulted in an estimated 0.3 percent decline in industrial production,” the Fed noted in the report.
During the year, factory output grew by 5.9 per cent, up 0.3 per cent from its pre-pandemic level of February 2020.
Utilities saw the biggest gains, expanding 3.3 percent in August, after contracting 4.0 percent in the previous month. Consumer goods, the category with the next highest rate of expansion, grew 0.8 percent, followed by non-industrial supplies, which rose 0.6 percent in August.
While the storm caused plant closures for petrochemicals, petroleum refining and plastic resins, manufacturing managed to achieve 0.2 percent growth. Economists polled by Reuters expected a reading of 0.4 percent.
“Despite an estimated 0.2 percent decline due to Hurricane Ida, manufacturing output grew 0.2 percent in August and was 1.0 percent above its pre-pandemic level,” the Fed said in the report.
A separate report from the New York Fed, known as the “Empire State” index on current trading conditions, rose from 18.3 in August to 34.3 in September.
New orders, shipments and unfulfilled orders all posted substantial growth, while labor market indicators pointed to strong employment growth. Specifically, the average employee workweek measure rose 15.4 points to 24.3 in September.
However, supply-side challenges remained, with the delivery time index reaching a record high of 36.5.
“Enthusiastic goods demand, rising business investment and rebounding demand from overseas are slated to propel activity at a healthy clip into 2022,” Oren Kluchkin, chief US economist at Oxford Economics in New York, told Reuters.
“While stagnant supply chains and hiring challenges will limit expansion, these headwinds will not subside until the COVID crisis at home and abroad is effectively contained,” he said.
Inflationary pressure continued, the price paid index near a record high and prices found a way to hit an all-time high of 47.8.
“Looking ahead, firms were very optimistic that the situation would improve over the next six months, and there was a significant increase in capital expenditure and technology spending plans,” the report’s authors wrote.
Reuters contributed to this report.
This News Originally From – The Epoch Times