Output in industry increased.
(Photo: AP)
Washington US companies expanded their production more than expected in August. Overall production – industry, utilities and mining combined – increased by 0.4 percent compared to the previous month, as the US Federal Reserve announced on Friday in Washington. Economists surveyed by the Reuters news agency had only expected an increase of 0.1 percent, revised downwards from plus 0.7 percent in July.
As experts expected, industrial emissions alone increased by 0.1 percent in August compared to the previous month. It is fitting that the industry slowed down its downward trend somewhat in August, as shown by the Institute for Supply Management (ISM) company survey for the sector.
Consumer sentiment in the USA, on the other hand, deteriorated significantly in September. The barometer fell by 1.8 to 67.7 points, as the University of Michigan announced on Friday in its monthly survey. Economists polled by Reuters had expected a slight decline to 69.1 points. Consumers rated their situation worse than in the previous month, but were somewhat more optimistic about the coming months.
Consumers remain cautious
“At 67.7 points, the index is currently around 35 percent above its historic low in June 2022,” said survey leader Joanne Hsu. What is noteworthy, however, is that both short- and long-term economic expectations improved slightly this month, even if consumers remained relatively cautious about the future development of the economy.
The increased energy prices and the overall high cost of living are currently curbing the desire to buy. Consumer prices rose by 3.7 percent in August, after 3.2 percent in July, and were thus on the rise again. However, consumers’ inflation expectations have now fallen: looking at the next twelve months, they expect an inflation rate for goods and services of 3.1 percent. In August, consumers had estimated 3.5 percent.
The Fed has raised key interest rates from near zero to a range of 5.25 to 5.50 percent since the beginning of 2022 in order to curb inflation and cool the hot labor market. She wants to make it dependent on the economic data whether she will raise the key interest rates further on September 20th or not. It is widely expected on the financial markets that the monetary authorities will take a break from interest rates.
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