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(Bloomberg) -- US industrial production fell in September, restrained by a decline in factory output that reflected a strike at Boeing Co. and two hurricanes. Most Read from Bloomberg Inside the ‘Utopias’ of Mexico City One City’s Plan to Re-Link a Neighborhood That Robert Moses Divided How Mexico City Averted All-Out Drought Chicago Should Consider Furloughs, Higher Booze Tax, Watchdog Says Mexico Seeks to Halve Permitting Time to Attract More Factories The 0.3% decrease in production at factories, mines and utilities followed a downwardly revised 0.3% gain a month earlier, Federal Reserve data showed Thursday. Manufacturing output dropped 0.4%, after a sizable downward revision in the previous month. Mining and energy extraction slid 0.6%, depressed by hurricanes Francine and Helene.
Output at utilities increased for the first time in three months. A strike by aircraft machinists held down industrial production by an estimated 0.3%, while the effects of the hurricanes subtracted a similar amount, the Fed said. Production of aerospace equipment tumbled 8.3% during the month. Manufacturing, which accounts for three-fourths of total industrial production, has struggled amid high interest rates as well as uncertainty about the US presidential election. The Fed’s report showed weaker production of motor vehicles, furniture and textiles during the month.
Output of business equipment, while restrained by the drop in aircraft, was also held back by weaker production of industrial and information processing equipment. The Institute for Supply Management’s latest measure of factory activity shrank in September for a sixth month, reflecting weak orders and declining employment. The US has lost 34,000 manufacturing jobs in the past two months, and the number of factory workers on payrolls now stands at a two-year low, government data show. US producers are also contending with tepid export markets and higher borrowing costs that have restrained factory output. Domestic consumer demand, however, remains solid.
That helped boost consumer goods production for a second month. What Bloomberg Economics Says... “Hurricane Helene presented a downside risk to September’s industrial-production data, but the actual downside surprise was due more to restrictive monetary policy than weather. Paired with downward revisions to the August data, we can see monetary policy still weighing on the more interest-sensitive sectors in the economy.” — Stuart Paul. To read the full note, click here A report earlier on Thursday showed retail sales strengthened in September by more than projected in a broad advance.
The sales figures cap another likely quarter of solid economic growth and consumer demand fueled by a hardy labor market. Story continues The Fed’s report, meanwhile, also showed capacity utilization at factories, a measure of potential output being used, dropped to 76.7%. The overall industrial utilization rate eased to 77.5%. (Adds Bloomberg Economics comment) Most Read from Bloomberg Businessweek BYD Is Winning the Global Race to Make Cheaper EVs A Fentanyl Vaccine Is a Long Shot That Just Might Work How Starbucks Became a Sugary Teen Emporium The World’s Central Banks Aren’t Following the Fed’s Lead Anymore Why OpenAI Is at War With an Obscure Idea Man ©2024 Bloomberg L.P. View comments
US Industrial Production Declines on Strike, Hurricane Effects
October 18, 2024 01:01 AM AEDT | By EODHD
