US industrial production fell more than expected in August, hurt in part by a sharp decline in utilities output, the Federal Reserve said on Thursday.
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Industrial production fell 0.4% in August after a revised 0.6% rise in the prior month and a revised 0.5% gain in June.
Economists had expected production to dip by 0.2 percent compared to the 0.7 percent increase that had been reported for the previous month.
“A decline in the August ISM manufacturing production index below the key 50 level for the first time since December 2015 and a 0.6% drop in factory production worker hours” pointed to a drop in manufacturing output, according to Wells Fargo’s Sam Bullard in a preview. However, the index for utilities fell 1.4 percent.
The report also said mining output surged up by 1.0 percent in August following a 0.2 percent uptick in July. Manufacturing as a whole climbed 0.7% from a year ago, while the mining sector declined 2.4% and utilities sector rose 0.7%. Following two consecutive monthly increases, the index for utilities fell back 1.4 percent in August.
Capacity utilization for the industrial sector edged lower to 75.5% in August from 75.9% in July and was slightly below the 75.7% analyst were looking for.
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