The gain in July for manufacturing was revised up 0.4 percentage point, to 1.4%; in addition, factory output for April through June is now somewhat less weak than reported previously. Production at mines moved up 0.5% in August.

 

The output of utilities gained 1.9%, as temperatures swung from an unseasonably mild July to a slightly warmer-than-usual August. At 97.4% of its 2002 average, total industrial production was 10.7% below its level of a year earlier.

 

In August, the capacity utilization rate for total industry advanced to 69.6%, a level 11.3 percentage points below its average for the period 1972 through 2008.

 

The chief economist for Manufacturers Alliance/MAPI, Daniel J. Meckstroth, said on the report:

 “The Federal Reserve reports that industrial production increased 0.8% in August and manufacturing production expanded 0.6%. Manufacturing activity has now increased for two consecutive months.  A general  inventory swing and the Federal auto incentive program have kick-started the industrial recovery. The automotive ‘Cash for Clunkers’ program boosted sales at the time when automakers had already pared inventories, causing auto plants to reopen and quickly scale up production.  Motor vehicle assemblies increased 43% in July and another 12% in August. 

 

“Fortunately, the manufacturing rebound is relatively broad and not limited to autos as 12 of the 20 major manufacturing industries posted growth in August. … We expect the improvement in manufacturing activity to continue as inventories are rebalanced and the current positive momentum builds on itself. Nevertheless, we only expect a modest pace of recovery in the general economy because of the headwinds of deleveraging, so the current fast pace of growth in manufacturing is likely to slow in the final months of the year.”