US DATA: Aug industrial production -1.2% (first drop since March in a
far larger than expected decline) after +0.5% downward rev in July; Fed
said “Hurricane Isaac restrained output in the Gulf Coast region at the
end of August, reducing the rate of change in total industrial
production by an estimated 0.3 percentage point.” Aug IP included -0.7%
mfg, -1.8% mining (mainly due to precautionary Gulf shutins) and -3.6%
utilities so the hurricane only added to underlying weakness. In mfg,
consumer and business output fell, but defense was +0.5% (vs +1.9% in
Jul after a strike at a major military aircraft facility was settled –
so Aug was perhaps a continuation). Aug CapUtil was 78.2%, -1 pt, but
the level remains more than 2 pts below its long-run avg.