Industrial production saw an increase of 0.1% in September after falling 0.5% in August, according to the most recent Federal Reserve report. This marks a rise in the third quarter of 1.8% at an annual rate, the first quarterly increase since the third quarter of 2015.
September also saw an increase in manufacturing output of 0.2%, at an annual rate of 0.9% in the third quarter, while mining posted a gain of 0.4%, which partially offset a decline in August. Total industrial production in September was 1% lower than its level a year earlier. Capacity utilization for the industrial sector inched up 0.1% in the month to 75.4%, meaning that factories are running at three-quarters capacity, a level that is 4.6 percentage points below their long-run average from 1972 to 2015.
In a Bloomberg survey of economists, the median forecast called for a 0.1% gain for factories. Estimates for factory output in the survey ranged from a decline of 0.2% to an increase of 0.4%. Several forces have been a drag on manufacturing output, including lower oil prices and a strong dollar, but there are signs of hope for modest growth, sources have indicated.
September marked increases in other sectors. Output of consumer goods rose 0.2%, as did the index for consumer nonenergy nondurables, indicating gains for chemical products and clothing. The production of nondurables increased 0.5%.
Declines in September included a drop in consumer energy products of 1%. Business equipment was down 0.2% from decreases in both transit equipment and information processing equipment. The production of materials fell 0.2%, reflecting that declines in durable and energy materials outweighed gains for nondurable materials.
– Adam Fusco, editorial associate