US Industrial Production Better Than Expected


US industrial output rose 1 percent in September of 2014, following a revised 0.2 percent drop in August. It is the highest gain in nearly two years, driven by a surge in mining and utilities output.

In September, manufacturing production moved up 0.5 percent with widespread gains across its components. Output increased at an annual rate of 3.5 percent in the third quarter; on average, it has advanced at a pace of about 4 percent over the past four quarters. The factory operating rate rose 0.2 percentage point in September to 77.3 percent, a rate 1.4 percentage points below its long-run average.

The production of durable goods increased 0.4 percent in September and rose at an annual rate of 6.6 percent in the third quarter; it has increased in each quarter since the third quarter of 2009. In September, the indexes for aerospace and miscellaneous transportation equipment, for furniture and related products, and for miscellaneous manufacturing all posted increases of more than 1 1/2 percent; decreases of more than 3/4 percent were registered both by wood products and by motor vehicles and parts. Capacity utilization for durable goods manufacturing increased 0.1 percentage point to 77.6 percent, a rate 0.6 percentage point above its long-run average.

The production of nondurable goods moved up 0.5 percent in September and increased at an annual rate of 1.2 percent in the third quarter. With the exception of petroleum and coal products, each of the major components of nondurables posted gains in September. The largest increases were recorded by apparel and leather and by plastics and rubber products. The operating rate for nondurable manufacturing increased 0.3 percentage point to 78.6 percent, a rate 2.1 percentage points below its long-run average.

The output of non-NAICS manufacturing industries (publishing and logging) was unchanged in September following a decrease of 0.6 percent in August. The index dropped at an annual rate of 12.5 percent in the third quarter. As a result of continuing declines in the index for publishing, the output of non-NAICS manufacturing industries has trended downward over the past 15 years.

Mining output rose 1.8 percent in September and has advanced 9.1 percent in the past 12 months. Capacity utilization at mines moved up 0.9 percentage point in September to 90.1 percent, a rate 2.8 percentage points above its long-run average. The output of utilities jumped 3.9 percent, an increase that likely reflected unseasonably high demand for air conditioning as temperatures swung from below normal in August to above normal in September. The operating rate for utilities in September increased 2.9 percentage points to 79.2 percent, a rate 6.9 percentage points below its long-run average.

Capacity utilization rates in September for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.8 percentage point to 87.6 percent, a rate 1.3 percentage points above its long-run average; at the primary and semifinished stages, utilization moved up 0.7 percentage point to 77.7 percent, a rate 3.1 percentage points below its long-run average; and at the finished stage, utilization increased 0.2 percentage point to 77.1 percent, a rate equal to its long-run average.

At 105.1 percent of its 2007 average, total industrial production in September was 4.3 percent above its level of a year earlier. For the third quarter as a whole, industrial production advanced at an annual rate of 3.2 percent, roughly its average quarterly increase since the end of 2010. 

US Industrial Production Better Than Expected


Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com
10/16/2014 2:30:41 PM