The 2020 Mid-Year Economic Update_long

Industrial Production Up 1% in September

Index advances at annual rate of 3.2 percent for third quarter.

Industrial production increased 1 percent in September and advanced at an annual rate of 3.2 percent in the third quarter, roughly its average quarterly increase since the end of 2010. In September, the index for manufacturing output increased 0.5 percent, while the indexes for mining and for utilities climbed 1.8 percent and 3.9 percent, respectively.

For the third quarter, manufacturing production rose at an annual rate of 3.5 percent and mining output increased at an annual rate of 8.7 percent. The output of utilities fell at an annual rate of 8.5 percent for a second consecutive quarterly decline. At 105.1 percent of its 2007 average, total industrial production in September was 4.3 percent above its level of a year earlier.

The capacity utilization rate for total industry moved up 0.6 percentage point in September to 79.3 percent, a rate that is 1 percentage point above its level of 12 months earlier but 0.8 percentage point below its long-run (1972–2013) average.

“Manufacturing has expanded at a more rapid pace than the overall economy since 2009 and the September report, while positive, provides no indication as to what can be expected going forward,” said Don Norman, director of economic studies for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation. “Recent events, including the slowdown in economic growth in Europe and China, the intensifying conflict with ISIS in Syria and Iraq, and now the threat posed by Ebola in the United States, present the economy and manufacturing with new challenges.”

In September, manufacturing production moved up 0.5 percent with widespread gains across its components. Output increased at an annual rate of 3.5 percent in the third quarter; on average, it has advanced at a pace of about 4 percent over the past four quarters. The factory operating rate rose 0.2 percentage point in September to 77.3 percent, a rate 1.4 percentage points below its long-run average.

The production of durable goods increased 0.4 percent in September and rose at an annual rate of 6.6 percent in the third quarter; it has increased in each quarter since the third quarter of 2009.

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