The Shutdown Takes Its Toll on U.S. Manufacturing
Industrial production in the United States sputtered into a slightly higher gear in September. The U.S. Federal Reserve reported on Monday that its index for industrial production (the IPI, which measures output from the manufacturing, mining, electric, and gas industries) increased from 99.5 in August to 100 in September, bringing the index in line with its 2007 average for the first time since the financial crisis.
The growth — o.6 percent on the month — beat expectations for a more modest increase of 0.4 percent but does little to dissipate the bad mojo that has been condensing around the industry over the past few months. Much of the September increase was led by utilities, which can be expected at this time of year, and therefore doesn’t necessarily indicate strong fundamental growth. Manufacturing growth in particular was underwhelming, with the component index climbing just 0.1 percent on the month instead of the 0.3 percent expected by economists.
The total index for industrial production has climbed 3.2 percent on the year, while manufacturing is up 2.6 percent. Capacity utilization — a measure of how fully potential production is being capitalized on — increased to 78.3 percent from 77.9 percent, up 1.8 percentage points on the year but still below the long-run average of 80.2 percent.