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Economy in Brief

U.S. Industrial Production Declines
by Tom Moeller  October 17, 2019

Industrial production fell 0.4% (-0.1% y/y) during September following a 0.8% August rise, revised from 0.6%. A 0.1% decline had been expected in the Action Economics Forecast Survey. Factory sector output weakened 0.5% (-0.9% y/y) and reversed most of August's 0.6% rise. Output was held back by the strike at General Motors. Outside of the auto sector altogether, production fell 0.2% (-0.5% y/y) after a 0.7% rise. Production in the mining sector fell 1.3% (+2.6% y/y) after a 2.4% increase. Utilities output rose 1.4% (1.1% y/y) following a 0.2% improvement.

Output of final products decreased 0.3% (-0.6% y/y) and reversed the August increase. Consumer goods production eased 0.2% (-1.0% y/y). Durable consumer goods output fell 2.8% (-3.1% y/y) as auto production fell 5.4% (-5.0% y/y) following a 1.1% decline. Computers, video & audio production eased 0.6% (+12.9% y/y), but appliance output gained 0.5% (-2.8% y/y) for a second straight month. Nondurable consumer product output rose 0.3% (-0.4% y/y) as apparel production rebounded 2.3% (-6.4% y/y) following two months of decline. Chemical output fell 1.0% (+0.4% y/y) but food & tobacco product production rose 0.4% (-1.7% y/y). Business equipment production fell 0.7% (-0.9% y/y) as industrial & other production fell 1.4% (-2.0% y/y) and reversed the prior month's gain. Information processing & other equipment output strengthened 1.1% (6.5% y/y).

Construction supplies production was unchanged (1.2% y/y). Materials production fell 0.5% (+0.2% y/y) as durable goods output declined 0.9% (-1.3% y/y) and nondurable materials production eased 0.2% (-1.6% y/y). Energy materials production fell 0.4% (+2.6% y/y).

In the special aggregate groupings, production of computers, communications equipment & semiconductors rose 0.2% (2.5% y/y). Computers & peripheral output declined 1.6% (+1.5% y/y) while semiconductor & related electronic component production rose 0.7% (-1.0% y/y). Factory output excluding high-tech and motor vehicles fell 0.2% (-0.6% y/y).

The capacity utilization rate fell to 77.5% and reversed most of its August rise. It remained below the November 2018 high of 79.6%. The factory sector utilization rate declined to 75.3% and remained below the December 2018 high of 77.3%. Factory sector capacity increased 1.3% y/y.

Industrial production and capacity data and US Population-Weighted Heating and Cooling Days are included in Haver's USECON database. Additional detail on production and capacity can be found in the IP database. The expectations figures come from the AS1REPNA database.

Industrial Production (SA, % Change) Sep Aug Jul Sep Y/Y 2018 2017 2016
Total Output -0.4 0.8 -0.2 -0.1 3.9 2.3 -2.0
Manufacturing -0.5 0.6 -0.4 -0.9 2.3 2.0 -0.8
    Consumer Goods -0.2 0.1 0.0 -1.0 2.1 0.5 0.6
    Business Equipment -0.7 1.1 -0.5 -0.9 3.2 3.6 -5.3
    Construction Supplies 0.0 0.7 -1.2 1.2 2.8 3.5 0.9
  Materials -0.5 1.2 -0.2 0.2 5.9 2.7 -3.0
Utilities 1.4 0.2 4.2 1.1 4.4 -0.8 -0.4
Mining -1.3 2.4 -2.4 2.6 12.4 7.4 -9.9
Capacity Utilization (%) 77.5 77.9 77.4 79.3 78.7 76.5 75.0
  Manufacturing 75.3 75.7 75.4 76.9 76.6 75.1 74.2
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