Led by a big drop in auto production, U.S. industrial output plunged 1.1% in August, the biggest drop since Hurricane Katrina three years ago, the Federal Reserve reported Monday.Statistical Release
The decline was much worse than the 0.3% decline expected by economists surveyed by MarketWatch. Output in the previous four months was also revised down by a total of half a percentage point.
Industrial production has now fallen 1.5% in the past year and 2% since its peak in January. Industrial production is one of four major indicators used to judge whether the economy is in a recession.
Capacity utilization -- a key gauge of inflationary pressures stemming from industrial bottlenecks -- dropped by a full percentage point to 78.7%, the lowest in nearly four years. Capacity utilization in manufacturing fell to 76.6%, about three percentage points below its long-run average and also the lowest in four years.
In August, total vehicle assemblies dropped to an 8.19 million annual rate, down 24% from the 2007 average. For light trucks, assemblies dropped 41% below last year's average.
Here is the Federal Reserve Industrial Production and Capacity Utilization Statistical Release.
On any other day motor vehicle output plunging 11.9% and industrial production tanking would be pretty grim news. Today, no one is talking about it.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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