Sept. 16 (Bloomberg) -- Reports today will probably show the Obama administration’s “cash-for-clunkers” plan rippled through the economy in August, helping to boost production and restrain prices, economists said.

Industrial output probably climbed 0.6 percent last month as automakers cranked up assembly lines, according to the median of 75 projections in a Bloomberg News survey. The cost of living likely rose 0.3 percent, the survey showed, reflecting a jump in fuel costs that was offset in part by the government’s incentive to trade in older cars.

The figures will underscore Federal Reserve Chairman Ben S. Bernanke’s view that the worst recession since the 1930s is probably over. A lack of inflation also means policy makers can continue to leave the benchmark interest rate near record-low levels to give the world’s largest economy time to gain speed.

“Manufacturing is generally improving but not knocking the ball out of the park yet,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “It does look like things are proceeding as the Federal Reserve anticipated, that is, the economy is bottoming out and we are entering a gradual recovery.”

The Fed’s industrial production report is due at 9:15 a.m. in Washington. Survey estimates ranged from a decrease of 0.3 percent to a 1.5 percent rise.

The projected gain would follow a 0.5 percent July rise in output and mark the biggest back-to-back increases since 2005.

‘No’ Inflation, ‘Good’ Growth

“The next six months seem reasonably easy to anticipate: no inflation, good economic growth,” Former Federal Reserve Chairman Alan Greenspan said in a broadcast to Tokyo clients of Deutsche Bank Securities Inc. today. “Things are turning and it looks good for the near term.”

The Labor Department’s data on August consumer prices are due at 8:30 a.m. Economists projected the report will show the cost of living was down 1.7 percent over the last 12 months, according to the survey median.

Excluding food and fuel, prices rose 0.1 percent, the same as a month earlier, according to the survey. So-called core prices were probably up 1.4 percent from August 2008, the survey showed, the smallest 12-month gain since February 2004.

Other reports today may show the current-account deficit, the broadest measure of trade because it includes transfer payments and investment income, narrowed in the second quarter, and homebuilders became less pessimistic this month.

Manufacturing showed “modest improvements” in most regions, the Fed said last week in its Beige Book business survey.

Fed Action

Fed policy makers are scheduled to meet next week. At last month’s meeting, Federal Open Market Committee members planned to slow the pace of the central bank’s Treasury purchases. Officials left the benchmark interest rate between zero and 0.25 percent and said economic conditions mean the rate will stay “exceptionally low” for an “extended period.”

Bernanke yesterday said the recession has probably ended, while warning that growth may not be strong enough to quickly reduce the unemployment rate.

Earlier reports have shown factories are growing. The Institute for Supply Management’s manufacturing gauge expanded in August for the first time in 19 months. The Fed Bank of New York’s Empire Manufacturing gauge for September jumped to the highest level in almost two years, according to data released yesterday.

‘Cash for Clunkers’

The “cash for clunkers” auto trade-in program, which ended Aug. 24, produced almost 700,000 purchases and the number of cars and light trucks sold in August showed the biggest one- month gain in almost eight years.

General Motors Co. last month called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as it boosted second-half production, in part because of the federal subsidies.

Foreign demand as the global economy recovers may also help U.S. factories. Exports rose 2.2 percent in July, according to a Commerce Department report released Sept. 10.

There are “signs of improvement” in the global economy, 3M Co. Chief Executive Officer George Buckley said in an interview on Sept. 5. Job cuts at the St. Paul, Minnesota-based company are mostly complete and it will step up investments in research and development, particularly in renewable energy and healthcare, he said.

The Labor Department has said the clunkers initiative, in which the government gave buyers as much as $4,500 for trading in older models for new, more fuel-efficient autos, will be considered as a discount off purchase prices. That will help depress the department’s consumer price index, economists said, limiting the effect of higher fuel costs.

The price of regular gasoline at the pump climbed 3.6 percent in August from the prior month, according to figures from AAA, the nation’s largest motoring organization.

                        Bloomberg Survey

===============================================================
                               CPI     Core     Ind.     Cap.
                                        CPI    Prod.    Util.
                              MOM%     MOM%     MOM%        %
===============================================================
Date of Release              09/16    09/16    09/16    09/16
Observation Period            Aug.     Aug.     Aug.     Aug.
---------------------------------------------------------------
Median                        0.3%     0.1%     0.6%    69.0%
Average                       0.3%     0.1%     0.6%    69.0%
High Forecast                 0.6%     0.2%     1.5%    70.0%
Low Forecast                 -0.1%    -0.3%    -0.3%    68.1%
Number of Participants          75       73       75       65
Previous                      0.0%     0.1%     0.5%    68.5%
---------------------------------------------------------------
4CAST Ltd.                    0.3%     0.1%     0.3%    68.8%
Action Economics              0.4%     0.1%     0.6%    69.0%
AIG Investments               0.3%     0.1%     0.3%     ---
Aletti Gestielle SGR          0.3%     0.1%     0.0%    68.5%
Ameriprise Financial Inc      0.2%     0.1%     0.9%    69.2%
Argus Research Corp.         -0.1%     0.1%     0.2%    68.7%
Banesto                       ---      ---      0.6%     ---
Bantleon Bank AG              0.3%     0.1%     0.8%     ---
Barclays Capital              0.5%     0.1%     0.8%    69.1%
Bayerische Landesbank         0.4%     0.1%     0.9%    69.3%
BBVA                          0.2%     0.1%     0.6%    68.7%
BMO Capital Markets           0.1%    -0.1%     0.6%    69.0%
BNP Paribas                   0.4%     0.1%     0.3%    68.7%
Briefing.com                  0.2%     0.0%     1.0%    69.6%
C I T I C Securities         -0.1%     ---      0.3%     ---
Calyon                        0.3%     0.1%     0.5%    69.0%
Capital Economics             0.1%     0.1%     1.2%    69.3%
CIBC World Markets            0.4%     0.1%     1.0%    69.1%
Citi                          0.3%     0.0%     0.1%    68.3%
ClearView Economics           0.1%     0.1%     0.8%    69.4%
Commerzbank AG                0.4%     0.1%     1.2%    69.5%
Credit Suisse                 0.1%    -0.1%     1.0%    69.4%
Daiwa Securities America      0.4%     0.1%     0.7%    69.0%
Danske Bank                   0.2%     0.2%     0.4%    68.6%
DekaBank                      0.3%     0.1%     0.9%    69.2%
Desjardins Group              0.2%    -0.1%     0.0%    68.6%
Deutsche Bank Securities      0.4%     0.1%     0.3%    68.7%
Deutsche Postbank AG          0.3%     0.1%     0.8%     ---
DZ Bank                       0.4%     0.1%     1.0%    69.4%
First Trust Advisors          0.3%     0.1%     0.7%    68.9%
Fortis                        0.4%     0.2%     0.5%     ---
Goldman, Sachs & Co.          0.2%    -0.1%     0.3%    68.8%
Helaba                        0.2%     0.1%     0.5%    69.0%
Herrmann Forecasting          0.2%    -0.1%     0.7%    69.1%
High Frequency Economics      0.4%     0.1%     0.6%    69.0%
HSBC Markets                  0.4%     0.1%     0.7%    69.1%
IDEAglobal                    0.3%     0.1%     0.8%    69.3%
IHS Global Insight            0.1%    -0.3%     0.7%     ---
Informa Global Markets        0.4%     0.2%     0.6%    68.9%
ING Financial Markets         0.2%     0.0%     0.9%    69.3%
Insight Economics             0.2%     0.0%     1.5%    69.7%
Intesa-SanPaulo               0.3%     0.1%     0.3%     ---
J.P. Morgan Chase             0.2%    -0.1%     0.7%    69.0%
Janney Montgomery Scott L     0.4%     0.1%     0.9%    69.3%
Jefferies & Co.               0.3%     0.1%     0.2%    68.7%
Johnson Illington Advisor     0.4%     0.2%    -0.3%    68.1%
Landesbank Berlin             0.1%     0.0%     0.0%    68.4%
Landesbank BW                 0.3%     0.1%     0.5%    69.0%
Maria Fiorini Ramirez Inc     0.3%     0.1%     0.5%    69.0%
Merrill Lynch/BAS             0.4%     0.1%     1.5%    69.6%
MFC Global Investment Man     0.2%     0.0%     0.5%    69.0%
Morgan Keegan & Co.           0.2%     0.2%     0.1%    68.6%
Morgan Stanley & Co.          0.2%    -0.1%     0.7%    69.1%
Natixis                       0.3%     0.1%     0.9%    69.5%
Newedge                       0.2%     0.1%     0.9%    69.3%
Nomura Securities Intl.       0.5%     0.1%    -0.2%    68.3%
Nord/LB                       0.4%     0.1%     0.2%    68.9%
PNC Bank                      0.5%     0.1%     0.2%    68.5%
Raymond James                 0.3%     0.1%     0.5%    69.1%
RBS Securities Inc.           0.4%     0.0%     0.5%    68.9%
Ried, Thunberg & Co.          0.3%     0.1%     0.9%    69.2%
Scotia Capital                0.3%     0.0%     1.0%     ---
Societe Generale              0.3%    -0.1%     1.0%    69.3%
Standard Chartered            0.3%     0.1%     0.9%    69.3%
Stone & McCarthy Research     0.3%     0.1%    -0.2%    68.3%
TD Securities                 0.4%     0.1%     1.0%    70.0%
Thomson Reuters/IFR           0.3%     0.0%     0.6%    68.9%
Tullett Prebon                0.3%     0.1%     0.7%    69.1%
UBS                           0.5%     0.1%     ---      ---
Union Investment              0.2%     0.0%     0.6%    69.2%
University of Maryland        0.6%     0.1%     1.0%    69.4%
Wells Fargo & Co.             0.4%     ---      0.5%    69.1%
WestLB AG                     0.4%     0.1%     0.7%    69.1%
Westpac Banking Co.           0.2%     0.0%     0.5%     ---
Woodley Park Research         0.4%     0.2%     0.3%    68.8%
Wrightson Associates          0.4%     0.1%     0.9%    69.2%
===============================================================

To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

Last Updated: September 16, 2009 01:01 EDT