US Manufacturing Contracted in August

U.S. manufacturing output contracted more than expected in August, dragged down by a sharp fall in auto production that could moderate economic growth in the third quarter.

American factories churned out 0.5 percent fewer goods last month, the Federal Reserve said on Tuesday.

Some slowdown was anticipated after an earlier survey of factory manager sentiment pointed to a sharp brake in activity.

Analysts polled by Reuters had expected a 0.3 percent decline in factory output.

The drop, combined with a fall in mining production and higher output for utilities, left overall industrial output 0.4 percent lower during the month.

Auto and autopart production contracted 6.4 percent, reversing much of the strong gains registered in July. Some of the slowdown in factory production could be due to a stronger dollar that is crimping exports, although sturdy domestic auto sales have given more reassuring signs for the economic outlook.

Via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza