Industrial Production Declined Last Month

Industrial production dropped 0.2% in August, the worst monthly performance since a 0.2% decline in April, the Federal Reserve said today.

It was the government’s first report on the manufacturing sector since the Persian Gulf crisis, and economists had expressed concern over the effect of sharply higher energy prices on factory activity.

Industrial production had been sluggish even before the Iraqi invasion of Kuwait, although it had fallen only twice previously this year, in April and in January. It was unchanged in July.

Output of durable goods, motor vehicles and other big-ticket items was off 0.2% on top of a 0.3% decline in July. Manufacturing of non-durable goods such as food and clothing was unchanged after a 0.5% gain a month earlier.