With the US election within reaching distance President Barak Obama was no doubt delighted to learn of the latest positive indication of US economic recovery.
According to a report releases by the Federal Reserve, US industrial production exceeded expectations, making up a little of the ground lost in the previous month.
August recorded a 1.4 per cent drop in factory, utility and mining output (the largest decline for 3 years) but figures for September have trounced economists predicted 0.2 per cent increase by showing a rise of 0.4 per cent. The output of consumer goods remained relatively unchanged from August but the Manufacturing sector rose by 0.2 per cent.
The manufacturing sector increase was key to the overall rise as it accounts for three quarters of the total Industrial Production figure and 12 per cent of the US economy as a whole.
According to a senior economist with Ameriprise Financial Inc; ‘The [manufacturing] sector is now stabilizing. We’re now in a situation where it’s getting less bad.’ However, Russell Price went on to caution, ‘We’re growing, but we’re not quite there yet. It’s going to be treading water through the end of the year.’
Also less positively, a separate report issued by the Labour Department revealed that the average cost of living across the US advanced for a second month in September. Although economists forecast a 0.5 per cent climb, the Consumer-Price Index actually increased by 0.6 percent – the same figure seen in August. Today’s result reflected a hike in energy prices which failed to be mirrored in other goods and services.
Nevertheless, the US economy is certainly in a stronger position then it was even a month ago. As Kurt McNeil, Vice President of GM’s US sales, asserted earlier in the month: ‘We continue to be encouraged by positive signs from the housing sector, lower jobless claims, higher consumer sentiment and higher consumer spending. The stiffest headwinds are uncertainty, some of which is related to the sovereign debt crisis in Europe and concerns about the pace of growth here at home’.
As of 15.05
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