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Much Weaker Than Expected

The Fed's Industrial Production and Capacity Utilization report for August did not live up to expectations but the rebound is in its fourth month.


  • Industrial production rose 0.4 percent in August for its fourth consecutive monthly increase. However, even after the recent gains, the index in August was 7.3 percent below its pre-pandemic February level. 
  • Manufacturing output continued to improve in August, rising 1.0 percent, but the gains for most manufacturing industries have gradually slowed since June. 
  • Mining production fell 2.5 percent in August, as Tropical Storm Marco and Hurricane Laura caused sharp but temporary drops in oil and gas extraction and well drilling. 
  • The output of utilities moved down 0.4 percent. At 101.4 percent of its 2012 average, the level of total industrial production was 7.7 percent lower in August than it was a year earlier. 
  • Capacity utilization for the industrial sector increased 0.3 percentage point in August to 71.4 percent, a rate that is 8.4 percentage points below its long-run (1972–2019) average but 7.3 percentage points above its low in April.

Expectations vs Actuals

Huge Miss in Industrial Production Recovery Expectations

The Econoday consensus estimates were a big miss across the board as the rise in IP has dramatically slowed.

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