In my commentary to the latest employment report
, industrial production was likely to fall significantly given the reported plunge in hours worked in manufacturing. And fall significantly it did
, 1.1% to be more specific compared to the previous month and 1.5% compared to August 2007. Manufacturing alone fell 1.0% compared to the previous month and 1.9% compared to August 2007. Also, previous industrial production numbers were downwardly revised by a total of 0.2%.
Mining have long been the strongest component of industrial production, and while it fell less than manufacturing and utilities, it too fell 0.4%. It is however up 3.5% compared to August 2007. If the downturn in commodity prices is sustained (increasingly likely after the Lehman collapse) then this source of strength will be removed too.