A report released Friday shows industrial production in the U.S. fell for the second consecutive month, the latest confirmation the economy lost some ground in the third quarter of the year.
This measure by the Federal Reserve of the total output at the nation’s factories, mines and utilities declined 0.2% in September from the month before. The August was revised, showing a 0.1% drop, smaller than the first reported 0.4% drop
September manufacturing output moved down 0.1% for a second consecutive monthly decrease. The index for mining fell 2%, while the index for utilities rose 1.3%.
For the third quarter as a whole, total industrial production rose at an annual rate of 1.8%, and manufacturing output increased 2.5%. A strong gain for motor vehicles and parts contributed substantially to the quarterly increases, according to the report.
Total industrial production in September was 0.4% above its year-earlier level.
Capacity utilization for the industrial sector fell 0.3 percentage point in September to 77.5%, a rate that is 2.6 percentage points below 1972–2014 average.
“Industrial production has failed to expand for much of the 2015 largely due to declines in mining output, reflecting the impact of lower energy prices, with only modest gains in the manufacturing sector,” said Josh Nye, economist at RBC Economics. “A strong U.S. dollar and weaker energy sector activity will likely remain a headwind for manufacturing, though strong domestic demand outside of energy should allow for continued output growth.”
Meantime, a separate report shows fears about the economy expressed on Wall Street do not extend to Maine Street.
The University of Michigan Survey of Consumers posted a gain of around 5.5% this month from last month’s final results in its measures of consumer sentiment, current economic conditions and consumers’ expectations. Results were also positive when compared to the same time last year.
“Personal financial expectations rose to their highest level since 2007, as did consumers' views toward purchases of durable goods,” said Richard Curtain, survey chief economist Richard Curtin. “While consumers anticipate a continued economic expansion, many expected strong headwinds from falling commodity prices, weakened economies in China and elsewhere as well as continued stresses on European countries."
He said “perhaps the most important finding is that low inflation and continued job growth have enabled consumers to adapt to a slower and more variable rate of economic growth by varying the pace of their spending without losing confidence that the expansion will continue.”