US automakers scaled back production in August as incentives ended as well as the midsummer surge of auto purchases. The pullback has taken a toll on the manufacturing sector.
On Monday, the Federal Reserve released figures detailing that US industrial production rose 0.2% in August after climbing by a revised 0.6% in July. These figures fell in line with economists’ expectations and left production up 6.2 per cent from a year ago.
Manufacturing production was hit by a 5.2 per cent drop in output of cars and car products. Along with the manufacturing slump, production of consumer goods was off by 0.4%.
In August, output at mines picked up but weaker production of electricity and natural gas slowed utilities.
Meanwhile, capacity utilization, which measures the percentage of plants in use, rose to 74.7%. Although that is 4.7 percentage points higher than August 2009, it remains almost 6 percentage points below the historical average, suggesting substantial resource slack in the economy.
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