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First Cut: August industrial production gained on mining, manufacturing, and utilities

Industrial production rose 0.6% in August from July, the best month-over-month increase in a year. However, compared to August 2018, production was up only an anemic 0.4%. For August, there were gains across industry groups of mining (up 1.4%), utilities (up 0.6%), and manufacturing (up 0.5%). The increase is good news after months of lackluster or declining performance for manufacturing, but the composition suggests that the rise is more of a correction after the prior month than a sustainable increase.

Mining gained after Hurricane Barry shut down activity in the Gulf of Mexico in July. Utilities were up somewhat during yet another heat wave in August with similar gains for electricity (up 0.6%) and natural gas (up 0.5%).

Manufacturing was higher in August for both durables and nondurables (both up 0.5%). However, production of motor vehicles and parts fell 1.0% in August. Excluding motor vehicles, manufacturing was up 0.6%. Motor vehicle assemblies fell to 11.21 million units (SAAR) in August from 11.64 in July. The number of units will drop precipitously in September due to the UAW strike affecting GM nationwide.

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