US in­dus­trial out­put rises marginally, util­i­ties weigh

Kuwait Times - - BUSINESS -

WASH­ING­TON: US in­dus­trial pro­duc­tion barely rose in Septem­ber as a re­bound in man­u­fac­tur­ing out­put was off­set by a de­cline in util­i­ties pro­duc­tion, sug­gest­ing a mod­er­ate ac­cel­er­a­tion in eco­nomic growth in the third quar­ter. The Fed­eral Re­serve said yes­ter­day in­dus­trial out­put edged up 0.1 per­cent last month after a down­wardly re­vised 0.5 per­cent de­cline in Au­gust.

Econ­o­mists polled by Reuters had fore­cast in­dus­trial pro­duc­tion gain­ing 0.1 per­cent last month after a pre­vi­ously re­ported 0.4 per­cent fall in Au­gust. In­dus­trial pro­duc­tion rose at an an­nual rate of 1.8 per­cent in the third quar­ter, the first quar­terly in­crease since the third quar­ter of 2015. The re­port came on the heels of data on Fri­day show­ing a mild in­crease in core re­tail sales in Septem­ber, which prompted the At­lanta Fed to lower its third-quar­ter gross do­mes­tic prod­uct es­ti­mate to be­low a 2.0 per­cent an­nu­al­ized rate. The econ­omy grew at a 1.4 per­cent pace in the sec­ond quar­ter.

The in­dus­trial sec­tor con­tin­ues to be hob­bled by the lin­ger­ing ef­fects of the dol­lar’s surge and oil price plunge be­tween June 2014 and De­cem­ber 2015. The sec­tor has also been hurt by busi­ness ef­forts to re­duce an in­ven­tory over­hang, which has re­sulted in fewer or­ders be­ing placed with fac­to­ries. But with the dol­lar’s rally fad­ing and oil prices sta­bi­liz­ing, the worst of the in­dus­trial down­turn is prob­a­bly over. A sur­vey early this month showed an ac­cel­er­a­tion in fac­tory ac­tiv­ity in Septem­ber, and new or­ders for man­u­fac­tured cap­i­tal goods have in­creased since June. While other data on Mon­day showed fac­tory ac­tiv­ity in New York State weak­ened fur­ther in Oc­to­ber, man­u­fac­tur­ers were more up­beat about the sec­tor’s prospects over the next six month.

The dol­lar rose slightly against a bas­ket of cur­ren­cies after the re­port, while prices for US Trea­suries were lit­tle changed. Last month, in­dus­trial pro­duc­tion was sup­ported by a 0.2 per­cent rise in man­u­fac­tur­ing out­put, which fol­lowed a 0.5 per­cent drop in Au­gust. Man­u­fac­tur­ing out­put was boosted by the pro­duc­tion of goods such as tex­tiles and plas­tics.

Mo­tor ve­hi­cle and parts pro­duc­tion edged up 0.1 per­cent, while the out­put of ma­chin­ery and pri­mary met­als fell. Man­u­fac­tur­ing pro­duc­tion rose at a 0.9 per­cent rate in the third quar­ter.

In Septem­ber, min­ing pro­duc­tion in­creased 0.4 per­cent as gains in oil and gas well drilling off­set a drop in crude oil ex­trac­tion. That left min­ing out­put ris­ing at a 3.7 per­cent rate in the third quar­ter fol­low­ing six con­sec­u­tive quar­terly de­clines. Util­i­ties pro­duc­tion dropped 1.0 per­cent last month after slip­ping 0.3 per­cent in Au­gust.

With out­put barely ris­ing last month, in­dus­trial ca­pac­ity use edged up 0.1 per­cent­age point to 75.4 per­cent, and is 4.6 per­cent­age points be­low its long-run av­er­age. Of­fi­cials at the Fed tend to look at ca­pac­ity use as a sig­nal of how much “slack” re­mains in the econ­omy and how much room there is for growth to ac­cel­er­ate be­fore it be­comes in­fla­tion­ary. —Reuters

—AP

SEAT­TLE: A group of work­ers at the C C Fil­son Co man­u­fac­tur­ing fa­cil­ity work at their sewing ma­chines, in Seat­tle. The Fed­eral Re­serve re­ported yes­ter­day on US in­dus­trial pro­duc­tion for Septem­ber.

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