Economy Watch: U.S. Industry Facing Tougher Times

"There is broadening evidence of a softening trend in industrial activity in the States, similar to what we're seeing in retail sales," James Knightley, chief international economist, ING Economics warns in a note to clients. Output fell 0.2% and there were downward revisions to the history. Regional manufacturing surveys also suggest tougher times are on the way for the fourth quarter.

US industrial production fell 0.2% in August (consensus 0.0%) while July was revised lower to 0.5% from 0.6%. The composition shows manufacturing was a little better than expected - rising 0.1%MoM rather than falling 0.1% with falling auto output offset by gains elsewhere, but again there was a 0.1pp downward revision to July. Utilities' output dropped 2.3% in response to cooler weather while mining was flat on the month despite oil and gas drilling rising 2.7%.