US August retail sales fall, industrial output edges up while China's output surges

Reuters reports on US retail sales and industrial production.

A Federal Reserve report showed August industrial output grew just 0.1 percent. It was the first big economic indicator to exhibit major fallout from the storm, which struck two days before the end of the month but whose effect was felt before it made landfall as oil and gas installations on the Gulf Coast battened down the hatches.

Utilities and mining output were particularly hurt, sliding 0.5 percent and 0.6 percent respectively, and the Fed said Katrina cut overall industrial output by 0.3 percentage point.

But in a sign of an otherwise healthy industrial sector, manufacturing output rose by 0.3 percent...

Separately, the Commerce Department said August retail sales fell 2.1 percent, the largest drop since November 2001. However, sales excluding autos climbed a stronger-than-expected 1 percent, showing strong demand before Katrina struck... Retail sales excluding motor vehicles and gasoline gained 0.5 percent following an unchanged reading in July, it said.

The Reuters report above did not mention August capacity utilisation in the US, which the Federal Reserve reported as 79.8 percent. Neither did Mark Thoma in his post on yesterday's data, apparently because of what Dallas Fed president Richard Fisher said: "We are pondering whether traditional measures of capacity utilization have much meaning in an increasingly interconnected economy."

But I think it is still noteworthy that capacity utilisation, at 79.8 percent, is clearly on a rising trend, having risen from 78.3 percent in August 2004, and is in fact at the highest level since 2000.

Now compare the US data with those from China.

Chinese factories reported production last month of 596.8 billion yuan (73.7 billion dollars), up 16 percent from a year earlier and a rise of 2.7 percent from July, the National Bureau of Statistics said Wednesday... Soaring exports were the major driver, with factories shipping 21.3 percent more to overseas markets, it said...

At the same time, in an indication of growing over-capacity, nearly two percent of last month's output failed to find buyers, the NBS said. This situation is worsening rather than improving, the bureau said, reporting that 98.28 percent of output was sold in August, down 0.51 percentage point from the same month in 2004.