Amid a collapse in US auto sales (and slumping retail sales), August Industrial Production collapsed 0.9% MoM. This is the biggest monthly drop since May 2009!
Industrial production declined 0.9 percent in August following six consecutive monthly gains.
Annual IP growth also staggered to 6 month lows.
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The Fed has its excuse for the collapse ready...
Hurricane Harvey, which hit the Gulf Coast of Texas in late August, is estimated to have reduced the rate of change in total output by roughly 3/4 percentage point.
The index for manufacturing decreased 0.3 percent; storm-related effects appear to have reduced the rate of change in factory output in August about 3/4 percentage point.
Industries with the largest storm-related effects were petroleum refining, organic chemicals, and plastics materials and resins...
Just wait for the v-shaped recovery from this (or not).
And finally, while Industrial Production remains 1% below its Nov 2014 highs (and unchanged from its Nov 2007 highs), The Dow Jones Industrials Average is up 30% from the Nov 2014 levels (and 57% from 2007 highs)...
So to sum up - IP collapsed in August, officials want to blame Hurrican Harvey (which makes sense), but even excluding Harvey's effects, IP would have dropped 0.15% - missing expectations of a 0.1% gain by 0.25 percentage points (i.e. it's not just Harvey!)
