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Economy Title: Production in U.S. Cooled in August as Automakers Scaled Back Sept. 15 (Bloomberg) -- -- Production in the U.S. cooled in August as automakers scaled back following a surge in output the prior month. Industrial production increased 0.2 percent last month after rising 0.6 percent in July, figures from the Federal Reserve showed today. Factory output climbed 0.5 percent excluding autos, the most since May. Ford Motor Co. is among companies not looking to boost U.S. output on concern a lack of jobs will hold back consumer spending, which accounts for about 70 percent of the world’s largest economy. Orders from overseas and the need for some companies to replace outdated equipment are supporting other manufacturers including Caterpillar Inc. “Most of the signs are still pointing to growth in the factory sector, although it’s going to be more modest than the explosion we saw earlier in the year,” Omair Sharif, a senior economist at RBS Securities Inc. in Greenwich, Connecticut, said before the report. “You’ll see manufacturing grow more at a pace that’s in line with the rest of the economy.” Other reports today showed manufacturing in the New York region expanded at a slower pace than forecast and import prices climbed. The Fed Bank of New York’s general economic index fell to 4.1 this month, the lowest reading since July 2009, from 7.1 in August. Readings greater than zero signal expansion. Measures of orders, sales and employment all improved, showing the drop in the index was mainly a reflection of a loss of confidence. Import Prices The cost of goods imported into the U.S. rose 0.6 percent in August, more than forecast, as crude oil and food costs jumped, masking contained inflation elsewhere, Labor Department figures showed. Economists had forecast industrial production would increase 0.2 percent after an originally reported 1 percent jump in July, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from a 0.3 percent drop to a gain of 0.5 percent. Capacity utilization, which measures the amount of a plant that is in use, increased to 74.7 percent last month from 74.6 percent in July. The gauge averaged 80 percent over the past 20 years, showing there’s enough spare plant equipment and space to prevent bottlenecks that would lead to higher prices. Auto output dropped 5 percent last month after surging 9.5 percent in July, the biggest gain in a year, as fewer factories closed for mid-year retooling. Ford Output Dearborn, Michigan-based Ford has no plans to increase production of any of its current models because demand is fragile in the weak economic recovery, George Pipas, the automaker’s sales analyst, said in an interview last month. The automaker plans to build 570,000 vehicles in the fourth quarter, the same as this quarter. The gain in manufacturing was paced by increasing output on business equipment that points to continued improvement in investment by companies in the U.S. or overseas. Output of business equipment increased 0.7 percent after a 1 percent gain. Production of technological gear, including computers, semiconductors and communications equipment rose 1 percent. Utility output decreased 1.5 percent after a 0.3 percent drop the prior month. Mining production, which includes oil drilling, increased 1.2 percent. Slowing household demand is prompting some companies to cut forecasts. Intel Corp. last month reduced its third-quarter revenue projection as the world’s biggest chipmaker cited weaker-than-expected consumer demand for personal computers in mature markets. Growing Exports Overseas demand is helping others cope with a slowdown in the U.S. Exports climbed in July to the highest level in almost two years. General Electric Co., the world’s biggest maker of jet engines, locomotives, power-plant turbines and medical-imaging equipment, is bolstering manufacturing in the U.S. “When I look across the variety of GE’s businesses we see the world getting better,” Chief Executive Officer Jeffrey Immelt said Sept. 13 at the Montana Economic Development Summit. “Slowly but surely we’re pulling out.” Shares of manufacturers have held up better than the broader market since evidence mounted that the economy was cooling. The Standard & Poor’s Supercomposite Machinery Index, which includes Deere & Co. and Caterpillar, has climbed 18 percent since the end of June, compared with an 8.8 percent increase in the S&P 500. President Barack Obama’s approval ratings have slipped as economic growth slowed this year and employment stagnated. Fifty-six percent of voters said they disapproved of his handling of the economy, according to a poll by Quinnipiac University taken Aug. 31 to Sept. 7. For Related News and Information:
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#1. To: WhiteSands (#0)
Dribble cup?
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