New Economic Numbers Mixed, Terrorist Situation Adds To Uncertainty
September 14, 2001
New economic reports released this morning, coupled with the uncertainty and nervousness following Tuesday’s terrorist attack, are providing a more cloudy picture than ever about the economy.
The Federal Reserve reports that industrial production in August fell 0.8%, the 11th straight monthly decline. The drop is the largest since a 1% decline in June and means that overall industrial production activity in the U.S. is 5% lower than it was a year ago.
Meanwhile the Labor Department reported the producer price index (wholesale prices) increased 0.4% in August, but when the volatile food and energy sectors are removed, the rate posted a decline of 0.1%.
Finally, the Commerce Department reported that retail sales increased 0.3% in August, the biggest monthly increase since April.
According to Newport Communications Senior Economist Jim Haughey, the retail sales figures were expected, while the price report was largely an “up-tick to the previous down-tick” in energy prices.
“The production drop means one of two things happened: Either orders went way down or everyone decided to suck up the rest of the inventories," Haughey said. "Either way, it’s bad news for freight levels. It will become more clear once inventory figures are released.”
Haughey says this also shows the manufacturing sector of economy is worse the many thought and as a consequence makes the economy a little weaker.
“At least retail sales still look promising,” he says. “If that continues that can certainly help turn things around.”
All of these figures were compiled before Tuesday’s terrorist attack. Economists are concerned that following this weeks’ deadly incident consumers could end up spending less money, sending the American economy into a tailspin. So far this year, consumer spending has been the only bright spot for the U.S economy. The manufacturing sector, which trucking relies on for so much of its business, has in contrast been near or at recession-like levels.