US Economy: Manufacturing Output, Industrial Production Increases More Than Expected In August

U.S. manufacturing output had increased by a strong 0.5% in August with industrial production also increasing by 0.6%, the Federal Reserve reported Tuesday. Primary metals and machinery production, along with strong mining output, were the main reasons for the increases.

Both figures increased more than economists had predicted.

Economists polled by Reuters expected a 0.2% jump for manufacturing in August, while a Marketwatch survey anticipated a 0.4% rebound for industrial production.

The Fed added that "factory output has increased 0.2% per month over the past four months after having decreased 0.5% per month for the first four months of the year."

Although the numbers suggest that U.S. manufacturing is coming back, analysts believe that trade tensions and a global economic slowdown could decrease the figures. The Institute for Supply Management said earlier this month that U.S. factory activity had decreased in August to its lowest level since January 2017, when President Trump took office.

One of Trump's major policy goals has been the rebirth of U.S. manufacturing with his "America First" policies. He has instigated a tariff war with China, as he believes that the Asian country takes advantage of the U.S. and floods the global market with cheap exports.

Critics have said that Trump's tariff policies towards China mean higher prices for American consumers. Goldman Sachs has said that the tariffs will cost every American family $1,000 while retail giant Walmart has said that it will have to increase its prices due to the higher cost of importing goods from China.