Industrial Production Falls Most in Three Years

Washington, DC, Sept. 15, 2008--A large drop in auto production resulted in a 1.1 percent plunge in industrial production in August, the biggest drop since Hurricane Katrina three years ago, the Federal Reserve reported Monday.

The decline was much worse than the 0.3 percent decline expected by economists.

Industrial production has now fallen 2 percent since its peak in January. Industrial production is one of four major indicators used to judge whether the economy is in a recession.

"Manufacturing is in recession, despite the export boom," said Ian Shepherdson, chief U.S. economist for High Frequency Economics.

Manufacturing output declined 1 percent in August, and fell 0.3 percent excluding vehicles.

Output of consumer goods fell 2 percent, largely because of motor vehicles and declining production of other consumer durables, such as electronics, appliances and furniture.