US industrial production fell a sharp 0.6% in September

U.S. industrial production fell 0.6% in September, the weakest showing since spring and a sign that the economy’s recovery from the pandemic recession may be faltering just as confirmed viral infections are resurging in much of the country

Via AP news wire
Friday 16 October 2020 15:39 BST
Economy GDP
Economy GDP (Copyright 2020 The Associated Press. All rights reserved.)

Support truly
independent journalism

Our mission is to deliver unbiased, fact-based reporting that holds power to account and exposes the truth.

Whether $5 or $50, every contribution counts.

Support us to deliver journalism without an agenda.

Louise Thomas

Louise Thomas

Editor

U.S. industrial production fell 0.6% in September, the weakest showing since spring and a sign that the economy’s recovery from the pandemic recession may be faltering just as confirmed viral infections are resurging in much of the country.

The Federal Reserve reported Friday that industrial production suffered its first decline since a 12.7% drop in April during the spring lockdowns of businesses that paralyzed the economy The key category that reflects manufacturing output fell 0.3%. At the same time, mining output, which includes oil and gas exploration, fell 5.6%. Production at utilities rose 1.7%.

Last month's reading on industrial production followed four straight increases that began in May after sharp declines in March and April. Industrial production has recovered more than half of its spring declines but remains 7.1% below its pre-pandemic level in February.

“Industrial output came in well below expectations, one of the first real signs that the recovery is losing momentum under the weight of the ongoing health crisis and fading support from fiscal relief,” Oxford Economics said in a research note.

Production of motor vehicles and parts fell for a second straight month, dropping 4% after a 4.3% decline in August which had followed big increases after auto plants re-opened.

The weaker-than-expected September showing may signal a slowdown in manufacturing, which had been a rare bright spot in the economy, that could hinder overall growth in coming months.

“Rising virus outbreaks that can interrupt activity remain a threat going forward,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

In September, industry operated at 71.5% of capacity, down from a reading of 77.4% of capacity a year ago.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in