Oct. 18, 2010, 10:08 a.m. EDT
Industrial production dips in September
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Industrial production slipped in September, the first drop after six months of gains, according to data released by the Federal Reserve on Monday.
Production slipped 0.2% compared to August, though it was up 5.4% from the September 2009. Economists polled by MarketWatch had expected a 0.2% increase.
“U.S. manufacturing output contracted by 0.2% in September, illustrating that the previously robust recovery in the factory sector is definitely behind us now and this could even be the start of a renewed downturn,” said Paul Ashworth, senior U.S. economist at Capital Economics.
Stocks nonetheless made gains in early trade Monday, helped by a separate report showing improving builders confidence. See Market Snapshot.
Indexes of production from April to August were each revised lower by marginal amounts.
The biggest drag on September output came from appliances, furniture and carpeting as well as from energy, both of which saw 1.9% decreases.
Automotive product production dropped 1%.
Transit equipment production improved 1.8%, and clothing and food and tobacco also saw output increases.
Capital Economics’ Ashworth noted that business equipment production rose just 0.1% -- demonstrating that after the release of pent-up demand, the growth rate of business investment has slowed.
Capacity utilization slipped to 74.7% from a 74.8% rate in August — well below the 80.6% average between 1972 and 2009.
For the third quarter as a whole, U.S. industrial production rose at an annualized 4.8% rate, slower than the approximately 7% growth seen during the first and second quarters of the year. Manufacturing production decelerated sharply in the third quarter