US Industrial Production fell -0.9% MoM in August, the worst decline since May 2009 during The Great Recession.


The Federal Reserve blamed the decline on Hurricane Harvey.

Hurricane Harvey, which hit the Gulf Coast of Texas in late August, is estimated to have reduced the rate of change in total output by roughly 3/4 percentage point.

The index for manufacturing decreased 0.3 percent; storm-related effects appear to have reduced the rate of change in factory output in August about 3/4 percentage point.

The good news in that Industrial Production YoY is growing at 1.54%.


But what is lost in The Fed translation is that Industrial Production growth YoY was NEGATIVE in 2015 and 2016. 

Capacity utilization? Despite The Fed’s massive intervention starting in late 2008, capacity utilization has never gotten above 80% and recently declined to 76.11%.


The Federal Reserve’s message is truly “Lost in Translation.”