US Industrial Production (AUG)
Actual: 0.2%
Expected: 0.3%
Previous: 0.5% (R+)
Industrial output in the US during the month of August was softer than expected at a rate of 0.2 percent - down from an upwardly revised pace of 0.5 percent in June - as companies scaled back production and investment plans amidst slowing consumption spending and a deepening housing recession. The only sector that kept the headline production figure positive was utility providers, as unusually hot temperatures pushed output up 5.3 percent. Auto production proved to be relatively weak, which is unsurprising after GM cut their 2007 sales estimates in light of falling demand and higher gasoline prices. Overall, the weaker US dollar can only support so much export growth, as domestic demand will need to maintain pace as well in order to keep expansion in the manufacturing sector resilient.