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Industrial Production – Early Impacts of Hurricane Katrina
by Nariman Behravesh
Bottom Line
- Industrial production rose a meager 0.1% in August.
- The mining sector, which includes oil and gas extraction, fell 0.6%, reflecting the Katrina-related shutdowns at the end of August.
- The Fed estimated that, without the impact of the hurricane, industrial production would have risen by 0.4%.
Outlook
The industrial production numbers in the next two months will look pretty awful as the full impact on the hurricane-related shutdowns show up in the data. The September numbers will likely show a large drop, and the October data will also be quite weak. However, as the reconstruction of New Orleans and the Gulf region gets under way, industrial production will rebound strongly at the end of this year and the beginning of next year.
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