Ahead of the Bell: US Industrial Production
WASHINGTON (AP) — Output at U.S. factories, mines and utilities was likely unchanged in July following a big jump the previous month.
Economists predict that industrial production showed no gain in August compared with July, according to a survey by FactSet.
Industrial production increased 0.6 percent in July from June. Factory output, the most important component of industrial production, rose 0.5 percent and has increased 21.9 percent since its recession low hit in June 2009.
But manufacturing has stumbled in recent months. A weak job market has made consumers more cautious about spending. And slower growth around the globe depressed demand for U.S. exports.
U.S. factory activity shrank for a third straight month in August, according to the Institute for Supply Management's closely watched survey of manufacturing conditions.
In August, employers added just 96,000 jobs. That's down from 141,000 in July and far below the average 226,000 a month created in the January-March quarter.
Growth slowed in the April-June quarter to an annual rate of just 1.7 percent, down from 2 percent in the January- March quarter and 4.1 percent in the final three months of last year.
On Thursday, the Federal Reserve announced a series of bold steps to boost financial markets and make borrowing cheap for years to come.
The Fed said it would spend $40 billion a month to buy mortgage bonds for as long as it deems necessary to make home buying more affordable. It also will keep short-term interest rates at record lows through mid-2015 — six months longer than previously planned. And the Fed said that it is ready to try other measures if hiring doesn't improve.
The Fed on Thursday lowered its outlook for economic growth this year, though it was more optimistic about the next two years. It said it expects growth to be no stronger than 2 percent this year, down from its forecast of 2.4 percent in June. It said it expected the unemployment rate to be no lower than 6.7 percent in 2014, and that inflation will remain at or below 2 percent for three more years.