U.S. industrial output plunged 0.9% in August—the most in eight years—mostly because of Hurricane Harvey’s damage to the oil refining, plastics and chemicals industries.
The storm lowered industrial production by about 0.75 percentage points, the Federal Reserve says, suggesting that production would have slipped without the hurricane.
Manufacturing has picked up since last summer as the dollar has fallen in value, which makes U.S. goods cheaper overseas, boosting exports. Manufacturing production fell 0.3% last month, though the Fed said that without the hurricane, it would have increased roughly 0.5 percent. And a survey of manufacturing firms that preceded Harvey found that factory activity rose to a six-year high in August.
Still, the report illustrates how Harvey has disrupted the wider U.S. economy. The data included signs of weakness, even excluding the impact of Harvey, says Jennifer Lee, senior economist at BMO Capital Markets.
“The August decline was widespread, with only the auto industry surprisingly gaining in the month,” she says.
