Industrial production drops 1.3% as Ida’s effects persist
SILVER SPRING, Maryland (AP) – US industrial production fell 1.3% in September, far more than expected as the lingering effects of Hurricane Ida continue to dampen activity.
The Federal Reserve reported on Monday that nearly half, or 0.6%, of the overall decline in total industrial production was attributable to the hurricane.
This is the worst performance since falling 3.1% in February, when severe winter storms hit much of the country, disrupting a wide range of manufacturing activities, from automobiles to chemical plants.
Industrial production covers manufacturing, utilities and mining. The government said manufacturing output fell 0.7%, driven by a 7.2% drop in motor vehicles and parts, as semiconductor shortages continued to plague the industry. Outside the auto industry, factory output fell 0.3%, according to the government.
Utilities output fell 3.6% while mining output, which includes crude oil extraction, declined 2.3%.
In a note to customers, economist Daniel Silver of JP Morgan said September’s data was disappointing, “particularly in manufacturing where it seems clear that supply chain issues continue to weigh on business. “.
Capacity utilization for the entire industrial sector fell by 1% in September to 75.2%, or about 4.4% below its average.
The Fed revised the August reading down from a gain of 0.4% to a decline of 0.1%.
Even with the larger-than-expected drop and downward revision in August, total industrial production grew at an annual rate of 4.3% in the third quarter. This is the fifth quarter in a row with a gain of 4% or more.