Plus: Industrial Output Rises, Jobless Claims Fall and Conveyor Sales Up Year-Over-Year.

Industrial Production Inches up in August
Total output from factories, mines and utilities in the United States rose 0.2 percent in August, despite some slowdowns in manufacturing and utilities usage, the U.S. Federal Reserve reported Wednesday.

Following a downwardly revised 0.6 percent growth rate in July, much of August’s slowed growth is attributable to the manufacturing sector, which accounts for the largest part of industrial production. After a 0.7 percent gain in July, manufacturing fell to 0.2 percent growth last month, largely due to a decline in automotive production. Excluding motor vehicles and parts, manufacturing grew by 0.5 percent. Mining output increased 1.2 percent in August, after rising 0.9 percent in July, while utilities declined 1.5 percent, following a 0.3 percent drop the prior month.

“A large 9.5 percent increase in motor vehicle production led to the surge in July, but a 5 percent decline in motor vehicle production in August was a major factor in last month’s growth deceleration,” Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, said in an analysis of the Fed report. “Auto factory production schedules were atypical this summer and the deceleration in August should be discounted.”

Although the growth rate has dipped, industrial production rates remain mostly positive, with 14 of 20 major industries reporting expansion in August. However, concerns remain over sluggish demand and consumer spending.

“Manufacturing has helped drive economic expansion over the past year. Companies built up their stockpiles in the first half of the year after slashing them during the recession,” the Associated Press explains. “But factory output has slowed in recent months. Businesses are no longer rebuilding their inventories. At the same time, demand for goods remains weak because consumers are saving more and spending with caution.”

While it’s likely to remain positive for the future, “[m]anufacturing production will decelerate its pace of growth reflecting the general weakness in the economic recovery but should continue to outpace growth in GDP this year and next,” according to Meckstroth.

Small Biz Outlook Remains Mixed
In the National Federation of Independent Business’s (NFIB) latest small-business optimism index, announced last week, the results, unsurprisingly, show that entrepreneurs remain cautiously optimistic. Of the index’s 10 components, five fell, four rose and one remained flat.

Most of the improvement was due to gains in expectations for business conditions six months into the year, a component that helped lower the index in July. The proportion of small-business owners who believe the economy will improve rose 7 percentage points last month, though the overall level was still at negative 8.0.

Despite a slight improvement, the findings remain in recession territory. NFIB’s small-business optimism index gained 0.7 points in August, rising to 88.8, while entrepreneurs remain concerned about the country’s economic outlook. A reading below 90 is “typical of a weak or recession-mired economy,” NFIB says.

“Small business owners are expecting sub-par growth in the second half of 2010,” Bill Dunkelberg, NFIB’s chief economist, said in an announcement of the findings. “Consumers are pessimistic, business owners are pessimistic and Washington’s leadership has been unable to inspire any confidence in the future.”

In related news, the U.S. Senate on Thursday passed a long-stalled bill to create a $30 billion government fund to increase lending for credit-starved small businesses, cut their taxes and boost federal loan programs for them. “The measure would provide 30 billion dollars in loans for small businesses and another 12 billion in tax breaks including investment credits, Agence France-Presse reports. The House of Representatives has already passed a similar bill and is expected to approve the Senate’s version this week.

Jobless Claims Hit 2-Month Low
Although the National Bureau of Economic Research, the panel of academic economists charged with the official designation of business cycles, today declared that the global economic recession officially ended in June 2009, making it the longest recession since World War II, millions of Americans continue to struggle with an unstable job market.

First-time jobless claims in the week ending Sept. 11 fell by 3,000 to 450,000, the lowest level in two months, while the four-week moving average for initial claims decreased 13,500 to 464,750, according to the U.S. Department of Labor last week. Jobless claims have fallen three of the past four weeks.

“The second straight week of declines pulled claims for unemployment benefits further away from a nine-month high of 504,000 touched in mid-August and claims are now in the upper end of a 400,000-450,000 range that analysts say is associated with sustainable job growth,” Reuters reports. “The impaired labor market, characterized by a 9.6 percent unemployment rate, is hobbling the economy’s recovery from its most painful recession since the 1930s.”

The latest weekly figures suggest that employers are cutting fewer jobs, but the employment market and the economy as a whole remain fragile, as jobless claims have yet to drop below the threshold that indicates broader economic health.

Conveyor Sales Up Year-Over-Year
The Conveyor Equipment Manufacturers Association reports that its Booked Orders Index in July was down 36 points, or 22 percent, from June’s index, but was up 49 percent from the same time last year.

Announced last week, the July 2010 Booked Orders Indexes were 216 for bulk-handling equipment and 102 for unit handling equipment (1990=100). The 12-month index for booked orders rose 3 percent from June 2010′s 12-month index.

Meanwhile, the association’s Billed Sales (Shipments) Index for July rose 6 percent from the previous month and 22 percent from July 2009. The 12-month index for Billed sales increased 2 percent from June 2010′s 12-month index.