US industrial production fell by 0.9% in August after a run of six monthly gains in succession. Figures just released by the US Federal Reserve show that Hurricane Harvey is estimated to have reduced the rate of change in total output by around 3/4 of a percentage point.
The index for manufacturing also slipped, by 0.3%; storm-related effects appeared to have reduced the rate of change in factory output in August by about 3/4 of a percentage point.
The manufacturing industries with the largest estimated storm-related effects were petroleum refining, organic chemicals, and plastics materials and resins.
Courtesy of the US Federal Reserve
Mining output fell 0.8% as Hurricane Harvey temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas. The output of utilities fell 5.5%; unusually mild temperatures, particularly on the East Coast, cut demand for air conditioning.
At 104.7% of its 2012 average, total industrial production in August was 1.5% above its year-earlier level. Capacity utilisation for the industrial sector decreased 0.8 percentage points in August to 76.1%. This is 3.8 percentage points below its 1972–2016 average.
A technical Q&A discussing the effect of Harvey on industrial production for August will be published on the Fed's website.
No discernible effect on jobs data
Hurricane Harvey had no discernible effect on the employment and unemployment data for August, according to the Bureau of Labor Statistics, which also published statistics today. Household survey data collection was completed before the storm.
Establishment survey data collection for this news release was largely completed prior to the storm, and collection rates were within normal ranges nationally and for the affected areas, says the BLS. Unemployment rates were higher in August in eight states, lower in one state, and stable in 41 and the District of Columbia.
Non-farm payroll employment increased in six states in August, decreased in three states, and was essentially unchanged in 41 states and the District of Columbia, adds the BLS.
Empire State holds steady
Away from hurricanes, the New York Federal Reserve reported that its September diffusion index of manufacturing business activity - otherwise known as the Empire State Survey - held steady at 24.4. The new orders index rose by four points to 24.9. The shipments index climbed four points to 16.2.
It says this points to ongoing solid gains in orders and shipments. Unfilled orders increased. Delivery times continued to lengthen. The inventories index rose to 6.5, indicating higher inventory levels. Labour market indicators point to a modest increase in employment and hours worked.
Echoing the rise in US inflation reported earlier this week, both input prices and selling prices rose at a faster pace than in August.
Indices assessing the six-month outlook indicated that companies surveyed continued to be optimistic about the short-term future. The index for future business conditions came in at 39.3. The index for future new orders edged up two points to 43.7. Employment is expected to grow moderately.
The New York Fed said the survey is sent on the first day of each month to the same pool of about 200 manufacturing executives in New York State, typically the president or CEO. About 100 responses are received. Most are completed by the 10th of the month, although replies are accepted until the 15th.
Respondents come from a wide range of industries from across the New York State. No single industry dominates the respondent pool.
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