WASHINGTON Government data show the nation's industrial output plunged in August by nearly four times the amount that had been expected. It's the worst performance since Hurricane Katrina devastated the Gulf Coast in 2005.
The Federal Reserve reported Monday that industrial output dropped 1.1 percent last month, far worse than the 0.3 percent decline that economists had been expecting.
The weakness was led by an 11.9 percent drop in production of motor vehicles and parts, reflecting the hard times facing the U.S. auto industry.
The problems in autos contributed to a 1 percent overall drop in manufacturing, the first decline since a 0.9 percent fall in April.
Production at the nation's utilities was off 3.2 percent during the month after a 1.6 percent decline in July. Mild weather in much of the country last month contributed to lower demands for air conditioning.
Output in mining, the category that includes oil and gas drilling, fell by 0.4 percent in August. The Fed said some of that weakness reflected precautionary shutdowns of oil platforms in the Gulf of Mexico ahead of Hurricane Gustav.
The U.S. manufacturing sector has been battered by a prolonged housing slump and feeble demand for autos, due to the weak economy and the big jump in gasoline prices that has occurred this year.
The problems hurting domestic demand have been partially offset by a boom in export sales, helped by a weaker dollar. However, economists worry that source of strength will come under pressure in coming months as some of America's biggest overseas markets in Europe and Asia face the threat of recessions.
The 1.1 percent decline in total output in August followed tiny gains of 0.1 percent in July and 0.2 percent in June, and was the largest drop since a 1.8 percent fall in September 2005.