Economic Report: U.S. industrial output dropped sharply in September
An earlier version misstated the last month when industrial output had a bigger decline. The drop is the biggest since February 2021..
The numbers: Industrial production fell a sharp 1.3% in September, the Federal Reserve reported Monday.
The gain was below Wall Street expectations of a 0.2% gain, according to a survey by the Wall Street Journal.
Adding to the sense of weakness in the data, industrial output in August was revised to a fall of 0.1% versus the prior estimate of a 0.4% gain.
Capacity utilization fell to 75.2% in September, the lowest rate since April. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities.
Big picture: This is the biggest decline since February, when Winter Storm Uri wreaked havoc in Texas. Manufacturing had been a bright spot even though the sector is struggling with supply bottlenecks.
Some of the weakness was due to Hurricane Ida. The hurricane cut about 0.6 percentage points from the drop in total industrial production, the Fed said.
Key details: Output at manufacturers fell 0.7% in September, led by a 7.2% drop in production of motor vehicles and parts. Excluding the auto sector, manufacturing was down 0.3%.
Utilities output fell 3.6% in September. Mining output, which includes oil and natural gas, fell 2.3% due to lingering effects of Hurricane IDa.
Market reaction: Stocks
opened lower Monday after China reported a sizable deceleration in growth in the third quarter.