US Industrial Output Growth Beats Forecasts

Industrial production in the United States increased 0.3 percent month-over-month in September of 2018, following a 0.4 percent rise in August and slightly higher than market expectations of a 0.2 percent gain. Both manufacturing and mining went up while utilities were flat. Still, output growth in September was held down slightly by Hurricane Florence, with an estimated effect of less than 0.1 percentage point. Industrial output went up an annualized 3.3 percent in the third quarter of 2018, below a 5.3 percent rise in the second quarter.

Manufacturing output moved up 0.2 percent in September. Factory output advanced 2.8 percent at an annual rate in the third quarter, a slightly faster gain than in the second quarter. In September, the indexes for durables and for other manufacturing (publishing and logging) rose, while the index for nondurables edged down. Production rose for most major categories within durable manufacturing. The largest increases were posted by motor vehicles and parts, wood products, and primary metals, while the only sizable decline was recorded by nonmetallic mineral products. Among nondurables, results were mixed, as the indexes for textile and product mills and for apparel and leather fell nearly 2 percent, but the indexes for printing and support and for petroleum and coal products rose about 1 percent.

Mining output increased 0.5 percent in September. The index has advanced about 24 percent from its trough in 2016, supported by gains in the oil and gas sector. The index for utilities was unchanged in September, as a decline in electric utilities offset an increase in natural gas utilities.

Capacity utilization for manufacturing edged up in September to 75.9 percent but was still 2.4 percentage points below its long-run average. The operating rates for durables and for other manufacturing increased, but the rate for nondurables decreased. The utilization rate for mining edged down to 92.1 percent but remained well above its long-run average. The utilization rate for utilities moved down to 77.7 percent and remained more than 7 percentage points below its long-run average.

Year-on-year, industrial production rose 5.1 percent, above 4.9 percent in August. It is the highest annual increase in industrial production since December of 2010.

US Industrial Output Growth Beats Forecasts

Federal Reserve | Joana Taborda |
10/16/2018 1:39:19 PM