U.S. industrial output growth slows; import prices up

U.S. industrial output rose at a slower pace in August and a measure of New York state business conditions slipped to the lowest level in more than a year, according to data on Wednesday that suggested the economy was cooling but not stalling.
Industrial production rose 0.2% in August, matching economists' forecasts for a sharp slowdown from July when unusually strong auto manufacturing lifted output, Federal Reserve data showed. July's gain was revised down to 0.6% from 1%.
Excluding motor vehicles and parts, total industry output increased 0.4% in August, compared with July's 0.3% advance.
Separately, the New York Fed's "Empire State" general business conditions index slipped to 4.14 in September from 7.10 in August. September's reading marked the lowest since July 2009 and was below market expectations for 8.0.
Economists often look to the Empire State report as an early gauge of national output patterns because it is one of the first data points released each month.
Beneath the disappointing headline, however, some economists saw cause for optimism in higher readings on new orders and the average workweek.
"We see this report as consistent with our view that manufacturing has downshifted to a lower pace of growth but not stagnated," Barclays Capital economist Nicholas Tenev said.
Another report from the Labor Department showed import prices increased 0.6% after rising by a revised 0.1% in July. Analysts polled by Reuters had forecast import prices rising 0.3% last month from a previously reported 0.2% gain in July.
Markets largely ignored the reports, focusing instead on developments on the foreign exchange markets, where the U.S. dollar jumped from a 15-year low against the yen on Wednesday after Japan intervened to sell the yen for the first time in six years.
Analysts were still encouraged that the New York state manufacturing index had not dropped below zero, which would have signaled a contraction in factory activity.
"The Empire manufacturing index was slightly weaker-than-expected, but did not fall below the zero line, further diminishing concerns about a double dip," said Jonathan Basile, an economist at Credit Suisse in New York.
The survey showed employment continued to improve.
Although import prices rose sharply in August, the annual increase of 4.1% was the smallest advance since November.
August's monthly rise reflected a 2.1% rise in the price of imported petroleum and petroleum products, the largest since April, after a 0.9% increase in July. Excluding petroleum, import prices rose 0.2%, reversing the prior month's 0.2% decline.
Prices of imported foods jumped 2.2% from a 0.1% rise in July. There were also increases in prices for industrial supplies and materials.
The Labor Department report showed export prices rebounded 0.8% last month after slipping 0.2% in July. Export prices were boosted by a 4.3% jump in food prices, the biggest rise in 14 months. Analysts had expected export prices to gain 0.2%. Compared to August last year, export prices rose 4.1%.