WASHINGTON —The Federal Reserve said Thursday that U.S. industrial output dipped 0.3% in September, a considerably larger drop than the expected 0.1% decrease. This marks a slowdown from the 0.3% increase in August, which was revised from an initial projection of 0.8%.
Two hurricanes and a strike at a major civilian aircraft manufacturer has been linked primarily to the drop, each of which have contributed a slowdown in industrial output growth by around 0.3%. Manufacturing production suffered from these interruptions with September numbers showing a 0.4% drop compared to the -0.1% consensus. Manufacturing production had climbed by 0.5% in August, down from 0.9%.
A key indicator of how completely companies are effectively utilizing their resources, capacity utilization dropped from August's revised result of 77.8% to 77.5%, behind the forecast. Moreover, the drop emphasizes ongoing difficulties the American manufacturing sector faces from labor conflicts, severe storms, and more general economic instability. Hence, analysts remain wary of these challenges as output data shows transient disruptions instead of long-term patterns.
