Newspaper article THE JOURNAL RECORD

Industrial Output Rises 0.3 Percent

Newspaper article THE JOURNAL RECORD

Industrial Output Rises 0.3 Percent

Article excerpt

WASHINGTON (AP) _ Output at U.S. factories, mines and utilities grew 0.3 percent in August, the government said Tuesday. Analysts said the fifth straight advance showed the industrial sector in the unusual position of trying to lead the economy out of recession.

"The report says the recovery in the industrial sector is alive and well," said economist David Jones of Aubrey G. Lanston & Co., a New York securities dealer. "The problem is what's going on in the rest of the economy."

Jones noted that in past recoveries consumer spending and the housing sector provided the economy with the muscle to pull itself out of recession.

This time, Jones added, consumer spending has faltered since picking up immediately after the Gulf War, "housing is doing no more than stumbling along" and the service sector remains in a recession.

Without increased consumer spending, which represents two-thirds of the nation's economic activity, "the economy either will pause or perhaps slip into a double dip sometime next year," he contended.

But at the White House, Michael Boskin, the chairman of the president's Council of Economic Advisers, was more upbeat, saying the new figures "augment other closely watched data on the economy that also have been improving in general in recent months."

"The increase in industrial production is further indication that the economy indeed did turn around in the second quarter (April-June) and economic recovery is under way," Boskin said.

The Federal Reserve report showed industrial production posted even stronger advances earlier this summer than had been first estimated.

Output was up a revised 0.6 percent in July, rather than 0.5 percent; 0.8 percent in June, instead of 0.6 percent, and 0.9 percent in May, rather than 0.8.

The report said automobile and truck production, after rising for five months, fell 9.3 percent last month and pulled the overall index down with it.

"Excluding cars and trucks, total industrial production rose 0.5 percent," it said.

Despite the recent increases, industrial production still was 2.0 percent below output in August 1990, a month after the recession began. …

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