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.
Go deeper: The U.S. coal industry is choking