Output at U.S. factories, mines and utilities fell unexpectedly by 0.1 percent in August as utilities production declined with cooler weather, a Federal Reserve report showed on Friday.
Capacity use slipped to a smaller-than-expected 82.4 percent from a revised 82.7 percent in July, the Fed said.
Analysts polled by Reuters were expecting industrial production to rise 0.2 percent and capacity utilization to edge up to 82.5 percent from the previously reported 82.4 percent use rate in July.
It was the first decline in industrial production since January and the lowest level of capacity use since May.
Even so, capacity utilization was 1.4 percentage points above its 1972-2005 average of 81.0 percent and 2.1 percentage points above its level in August 2005.
But the slowdown in production could provide additional evidence of easing economic growth for a central bank that is deemed likely to keep short-term interest rates steady at its policy-setting meeting next week.
“The economy has slowed down from what we have seen earlier in the year, but it is still consistent with growth overall,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.
U.S. Treasury debt prices extend their gains after the weaker-than-expected output report. The dollar was largely unchanged after the data.
Manufacturing output was unchanged in August as a rise in the production of durable goods was offset by a decrease in nondurables production, which included slides in output of textiles, paper, and plastics, the Fed said.
Mining output was down 0.3 percent due to a drop in oil and gas extraction, while utilities production slipped 0.8 percent on a 1.1 percent decline in electric utility output.
Manufacturing capacity use slipped to 81.0 percent from July’s 81.2. Still, it was 1.2 percentage points above its 1972-2005 average of 79.8 percent and 2.2 percentage points above its year-ago level of 78.8 percent in August 2005.
Motor vehicles and parts production was up 1.0 percent on the month but was down 2.7 percent from its year-earlier level.