Industrial Production Increases Nicely in September - October 28, 2013
The nation's factories were turning out more goods than expected in September, as delayed data from the Commerce Department showed that industrial production rose by a strong 0.6% last month in the aggregate. That was 0.2% above expectations. It also was the best increase in this category since February, when output had climbed by 0.7%.
For the third quarter as a whole, industrial production rose at an annual rate of 2.3%. Meantime, manufacturing output, the largest component by far in this category, edged up just 0.1% last month. Larger gains of 0.2%, and 4.4% were recorded, respectively, in the mining and utilities areas. The latter two sectors tend to be much more volatile than manufacturing, with the utilities area having showed declines for the past five months before the September surge.
Meanwhile, in the other part of this series, factory utilization, there was another overall increase, the second in a row, with capacity use rising from 77.9% to 78.3%. That was the largest such level of utilization since July of 2008, when the nation was in the depths of the long and severe recession.
Here, too, there was a big jump in usage at the nation's utilities, with capacity use in this volatile category climbing from 75.9% in August to 79.3% in September. Manufacturing use was flat at 76.1%, while usage eased ever so slightly, from 90.1% to 90.0% at the nation's mining operations.
Overall, then, this was a decent report, but hardly inspiring, as the outsized gains in the utilities sector, which can be heavily influenced by changing weather and temperature conditions, rather than economic fundamentals, take some of the glow off of this report, which on the face of it looks better than it probably was.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.