Industrial production falls 1.3% as effects from Ida linger
Silver Spring, Md. – U.S. industrial production fell 1.3% in September, much more than expected as the lingering effects of Hurricane Ida continue to stymie activity.
The Federal Reserve reported Monday that nearly half, or 0.6%, of the overall decline in total industrial production was attributable to the hurricane.
It was the worst showing since February’s 3.1% decline, when severe winter storms hammered much of the country, disrupting a wide swath of manufacturing activities from autos to chemical plants.
Industrial production covers manufacturing, utilities and mining. The government said manufacturing output fell 0.7%, dragged down by a 7.2% decline in motor vehicles and parts as shortages of semiconductors continued to thwart the industry. Outside of the auto industry, factory output declined 0.3% the government said.
Utilities output dropped 3.6% while mining production, which includes crude oil extraction, fell 2.3%.
In a note to clients, economist Daniel Silver of J.P. Morgan said the September data disappointed, “particularly in the manufacturing sector where it looks clear that supply chain issues are continuing to weigh on activity.”
Capacity utilization for the entire industrial sector fell 1% in September to 75.2%, about 4.4% below its average.
The Fed revised August’s reading down from a 0.4% gain to a 0.1% decline.
Even with the bigger-than-expected decline and August’s downward revision, total industrial production rose at an annual rate of 4.3% in the third quarter. It’s the fifth consecutive quarter with a gain of 4% or more.