US industrial production fell a sharp 0.6% in September
WASHINGTON (AP) - US industrial production fell 0.6% in September. This is the weakest reading since spring and a sign that economic recovery from the pandemic recession may stall as confirmed viral infections rebound across much of the country.
The Federal Reserve reported Friday that industrial production saw its first decline since plummeting 12.7% in April during the spring lockdown on businesses that crippled the economy. The key category, which reflects production output, decreased by 0.3%. At the same time, mining production, which includes oil and gas exploration, fell by 5.6%. Utility production increased 1.7%.
Last month's industrial production reading followed four consecutive increases that started in May after sharp declines in March and April. Industrial production has recovered more than half of its spring decline, but remains 7.1% below pre-February pandemic levels.
"Industrial production was well below expectations. This is one of the first signs that the recovery is losing momentum in the face of the ongoing health crisis and the support from tax breaks is waning," Oxford Economics said in a research note.
Automobile and spare parts production declined for a second straight month, down 4% after a 4.3% decline in August that had risen sharply after the auto plants reopened.
The unexpectedly poor result in September could point to a slowdown in the manufacturing sector, which has been a rare ray of hope in the economy and which could hamper overall growth in the months ahead.
"Rising virus outbreaks, which can disrupt activity, remain a threat in the future," said Rubeela Farooqi, US chief economist at High Frequency Economics.
Industry utilization was 71.5% in September, compared with 77.4% a year ago.
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