U.S. Industrial Production Unexpectedly Slumps Due To Harvey
With Hurricane Harvey negatively impacting output, the Federal Reserve released a report on Friday unexpectedly showing a notable decline in U.S. industrial production in the month of August.
The report said industrial production slumped by 0.9 percent in August after climbing by an upwardly revised 0.4 percent in July.
Economists had expected production to inch up by 0.1 percent compared to the 0.2 percent uptick originally reported for the previous month.
The Fed said Hurricane Harvey is estimated to have reduced the rate of change in total output by roughly three-quarters of a percentage point.
Utilities output plunged by 5.5 percent in August after surging up by 1.5 percent in July, as unseasonably mild temperatures, particularly on the East Coast, reduced the demand for air conditioning.
The report said mining output also fell by 0.8 percent in August following a 1.3 percent jump in July, with Harvey temporarily curtailing drilling, servicing, and extraction activity for oil and natural gas.
Manufacturing output also dipped by 0.3 percent in August after coming in unchanged in the previous month.
The Fed said storm-related effects appear to have reduced the rate of change in factory output by about three-quarters of a percentage point.
The manufacturing industries with the largest estimated storm-related effects were petroleum refining, organic chemicals, and plastics materials and resins.
The report also said capacity utilization for the industrial sector slid to 76.1 percent in August from 76.9 percent in July.
Capacity utilization in the utilities sector tumbled to 73.9 percent, while capacity utilization in the mining and manufacturing sectors dipped to 83.9 percent and 75.3 percent, respectively.