Industrial Production Up 0.1% in Sept.

Oct. 16, 2007
Manufacturing increased in Sept. after August decline

Industrial production increased 0.1% in September after having been unchanged in August, according to the Federal Reserve.

For the third quarter as a whole, industrial production rose at an annual rate of 4%, a pace that was 1/2 percentage point faster than in the previous quarter.

Output in the manufacturing sector rose 0.1% in September after a decline of 0.4% in August. The production of durable goods dipped 0.1%. Decreases were recorded in motor vehicles and parts, wood products, nonmetallic mineral products, and furniture and related products, whereas increases occurred in miscellaneous manufacturing; electrical equipment, appliances, and components; aerospace and miscellaneous transportation equipment; primary metals; fabricated metal products; computer and electronic products; and machinery.

The production of nondurable goods moved up 0.1%. Increases in the indexes for chemicals, for printing and support, and for apparel and leather more than offset declines elsewhere.

"While the UAW strike against General Motors exaggerated the decline in automotive product output, the manufacturing production report for September nonetheless paints a clear picture of overall sluggishness in factory performance," said Cliff Waldman, economist for the Manufacturers Alliance/MAPI. "Declines in the output of a wide range of consumer durable products was offset by strength in a number of business equipment categories, an industrial pattern indicative of a manufacturing sector that remains in a growth mode but is being impacted by a number of headwinds. These include the ongoing housing slump, persistent difficulties in the automotive industry, and sluggish capital spending that arises from concerns about the overall economic outlook.

"Global strength should continue to produce strong enough export demand to keep the U.S. manufacturing recovery alive," he added, "but mounting risks to the economic outlook will keep the pace of factory output growth subdued."

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