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Economy in Brief

U.S. Industrial Production Firms During September
by Tom Moeller  October 18, 2022

• Factory production leads increase.

• Consumer & business output both are strong.

• Capacity utilization returns to expansion high.

Industrial production increased 0.4% (5.3% y/y) during September after easing 0.1% in August, revised from -0.2%. Production rose 0.7% in July, revised from 0.5%. The level of industrial output during September was a record, and it has risen by roughly one-quarter since the 2020 low. A 0.1% improvement had been expected in the Action Economics Forecast Survey.

By industry group, manufacturing production increased 0.4% in September (4.7% y/y), the same as in August, revised from 0.1%. Durable goods rose 0.5% (6.0% y/y) after edging 0.1% higher in August. Computer & electronic products production gained 1.1% (1.9% y/y) for the second straight month. Motor vehicle & parts production rose 1.0% (19.4% y/y) after falling 1.5% in August. Electrical equipment & appliance production surged 0.9% in September (3.9% y/y) following declines in three of the prior four months. Furniture production rose 0.7 (+0.9% y/y), after declining in each of the prior six months. Machinery output rose 0.3% last month (5.2% y/y) after a 2.6% surge. Fabricated metal product output improved 1.0% (5.0% y/y) but primary metals eased 0.2% (-2.7% y/y), off for the second straight month. In the nondurable goods sector, production rose 0.3% (3.6% y/y) after rising 0.7% in August. Apparel output strengthened 1.6% in September (4.6% y/y) while petroleum & coal product output gained 1.1% (3.9% y/y) after strengthening 4.1% in August. Chemical output rose 0.3% (4.4% y/y) after a 0.7% rise, but paper production fell 0.9% (+0.6% y/y), the fourth decline in five months. Food, beverages & tobacco production rose 0.6% (3.3% y/y) after easing 0.1% in August.

Utilities output eased 0.3% (+0.5% y/y) in September after dropping 3.3% in August. Mining activity rose 0.6% (+11.1% y/y) in September after holding steady in August.

By market groups, consumer goods output rose 0.6% (3.8% y/y) in September, following declines in three of the prior four months. Business equipment production rose 0.5% (8.2% y/y) while construction supplies production jumped 1.1% (+3.6% y/y) after a 0.4% decline.

In the special classifications, factory output of selected high-tech industries rose 0.8% in September (4.9% y/y) after minimal gains in the prior two months. Manufacturing production excluding selected high-tech industries rose 0.4% (4.6% y/y) after a 0.2% August rise. Manufacturing production excluding both selected high-tech and motor vehicles & parts increased 0.3% (3.6% y/y) after a 0.5% August gain.

Capacity utilization rose to 80.3% in September from 80.1% in August. An 80.0% rate had been expected. Factory utilization rose to 80.0% in September from 79.7% in the prior month.

Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.

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