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The numbers: U.S. industrial production rose 0.4% in August, a much smaller gain than in the prior two months, the Federal Reserve reported Tuesday.
The gain in August was close to Wall Street expectations of a 0.5% gain, according to a survey by MarketWatch.
Manufacturing production surged a revised 6.1% in June – revised from a 5.7% gain. It slowed a bit to a revised 3.5% gain in July – up from prior estimate of a 3% rise. The index is still 7.3% below its pre-pandemic February level.
What happened: Manufacturing output rose 1% in August but the gains for most manufacturing industries have gradually slowed since June, the Fed said. Mining production fell 2.5% in August as hurricanes and tropical storms battered the Gulf of Mexico and caused sharp but temporary declines in oil and gas extraction. Production of cars and trucks fell 3.7% in August after a strong gain in the prior month.
Utilities fell 0.4% after a strong 3.8% rise in July..
Capacity utilization rose to 71.4% in August. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities.
Big picture: Manufacturing has been a bright spot in the economy as it has been easier to re-engineer factories during COVID-19 than it has been to reopen the shuttered service economy. Economists think the big uplift from the early summer is over.
Read:Economy needs more certainty, top economist says
Market reaction: Stocks opened higher on Tuesday with the Dow Jones Industrial Average DJIA, +0.61% up 186 points at the start of trading.
