Sep 18, 2019 - Economy & Business

Industrial production is the latest piece of strong U.S. economic data

U.S. industrial production jumped by the most in a year last month, rising by 0.6% and showing that perhaps the trade war isn't having as dire an impact on the U.S. economy as feared.

Why it matters: Industrial production is a measure of factory, mining and utility output, and came in well above economists’ expectations.

  • “This sector cannot be considered strong, but damage from slow growth abroad and trade tensions has not been severe so far,” Daiwa Capital Markets economist Michael Moran said in a note to clients.

The big picture: The U.S. manufacturing sector remains in a recession, largely as a result of the U.S-China trade war, but Tuesday's numbers show that it has not yet fallen off a cliff.

  • The Fed's industrial production index also remains above where it was as recently as 2015 when it last experienced a sustained downturn.

Between the lines: The pickup in August's data was due almost entirely to the mining sector, which rose 1.4%. The GM strike could complicate things for the September reading, as it could idle factories and impact the overall reading.

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