U.S. Industrial Production Unexpectedly Increases in September
Summary
- IP +0.3% (+0.1% y/y) in Sept.; Aug. revised down but July revised up.
- Mfg. IP recovers 0.4%, w/ durable goods up 0.4% and nondurable goods up 0.3%; motor vehicles production rises 0.3% vs. a 4.1% Aug. drop.
- Mining activity gains for the fourth straight month, but utilities output declines after two successive m/m rises.
- Key categories in market groups up except business equipment output.
- Capacity utilization increases to a five-month-high 79.7%.
Total industrial production rose 0.3% m/m (0.1% y/y) in September after being virtually unchanged in August (+0.4% initially) and a 1.0% rebound in July (+0.7% previously), according to the Federal Reserve Board. The September IP index at 103.6 was the highest since December 2018. The September m/m rise compared to expectations for no change in the Action Economics Forecast Survey. IP rose 0.6% q/q in Q3 2023 after a 0.2% q/q rebound in Q2 2023, rising at a 2.5% annualized rate following a 0.7% Q2 annualized rate.
By industry groups, manufacturing production grew 0.4% (-0.8% y/y) in September, the second m/m gain in three months, after a downwardly revised 0.1% easing in August (+0.1% previously). Durable goods production recovered 0.4% (0.4% y/y) following a 0.2% August decline, reflecting output increases of 2.4% (-1.6% y/y) in wood products, 1.5% (1.6% y/y) in primary metals, 0.9% (5.2% y/y) in aerospace & miscellaneous transportation equipment, 0.9% (-0.2% y/y) in miscellaneous durables goods, 0.4% (-1.3% y/y) in electrical equipment, appliances & components, 0.3% (7.0% y/y) in motor vehicles & parts, 0.3% (-1.2% y/y) in fabricated metal products, and 0.1% (-2.7% y/y) in nonmetallic mineral products. Other durable goods categories, however, fell m/m in September, reflecting output declines of 0.4% (-9.6% y/y) in furniture & related products, 0.3% (+2.6% y/y) in computer & electronic products, and 0.1% (-3.8% y/y) in machinery.
Nondurable goods production increased 0.3% (-2.0% y/y) in September after holding steady in August and July, reflecting output rises of 1.7% (-4.0% y/y) in plastics & rubber products, 0.6% (-3.4% y/y) in textiles & product mills, 0.5% (-9.4% y/y) in paper, 0.4% (1.4% y/y) in chemicals, and 0.2% (-2.5% y/y) in food, beverages & tobacco. In contrast, other nondurable goods categories fell m/m in September, reflecting output drops of 2.4% (-6.3% y/y) in printing & related support activities, 1.3% (-6.1% y/y) in apparel & leather goods, and 0.3% (-2.5% y/y) in petroleum & coal products.
Mining activity grew 0.4% (3.4% y/y) in September, the fourth consecutive m/m gain, following a downwardly revised 0.2% increase in August (+1.4% previously). Meanwhile, utilities output fell 0.3% (+2.0% y/y), the first m/m fall since June, after a 0.7% August rise (+0.9% previously).
By market groups, consumer goods output rose 0.3% (0.1% y/y) in September, the second m/m rise in three months, after a 0.1% downtick in August, reflecting a 1.2% gain (1.7% y/y) in durable consumer goods and no change (-0.3% y/y) in nondurable consumer goods. Construction supplies production increased 1.0% (-2.0% y/y), reversing a 0.5% August decline. Materials production rose 0.4% (0.9% y/y) in September after holding steady in August. To the downside, business equipment output fell 0.7% (-1.7% y/y), the first m/m fall since June, following a 0.1% August uptick.
In special classifications, factory output of selected high-tech industries advanced 0.6% (9.3% y/y) in September, the eighth straight m/m gain, on top of a 0.8% rise in August. Manufacturing production excluding selected high-tech industries rebounded 0.3% (-1.1% y/y), the second m/m increase in three months; manufacturing production excluding both selected high-tech and motor vehicles & parts rose 0.3% (-1.7% y/y), the second successive m/m rise.
Capacity utilization rose to 79.7% in September, the highest since April, from a downwardly revised 79.5% in August (79.7% initially); the latest reading was equal to its long-run (1972–2022) average. A 79.6% rate had been expected. Manufacturing capacity utilization rebounded to 77.8% in September from 77.7% in August (77.9% initially).
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.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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