Manufacturing output registered a slight uptick of 0.1 percent last month, indicating that the U.S. economy was sputtering even before the government shutdown.
The modest boost in factory output is down from a 0.5 percent gain in August, according to data released by the Federal Reserve.
Production of durable goods increased 0.5 percent last month and advanced at an annual rate of 2.7 percent in the third quarter, the Fed reported. The manufacture of motor vehicles and parts rose 2 percent last month, following a gain of 5.2 percent in August.
Smaller increases were noted in the production of wood products, primary metals, and aerospace and transportation equipment.
Declines were recorded in the production of furniture, computer and electronic products, electrical equipment, appliances, and nonmetallic mineral products. Factory production of textiles dropped 0.7 percent and the production of chemicals fell 0.6 percent.
Overall, industrial production rose 0.6 percent last month, largely attributed to a 4.4 percent boost in utility output, the Fed data show. Industrial production increased 0.4 percent in August.
Factory output is the largest component of industrial production and it did show signs of rebounding during the summer. But news reports indicated that manufacturers had grown more cautious and hiring slowed before the 16-day federal government shutdown, which ended Oct. 17.
Still, factory capacity utilization, which measures the amount of a plant being used, stood at 76.1 percent last month, the Fed reported. It had reached 76.5 percent in February, the highest level in nearly five years. However, it still falls short of the 40-year average of just over 80 percent.
In contrast to the Fed’s industrial production report, the Institute for Supply Management (ISM) painted a brighter picture. The trade group said factory output expanded last month at the fastest pace in more than two years. ISM’s October figures are due out on Friday.
Some economists see signs that manufacturing could pick up later this year or in early 2014.
“With a modest global recovery underway and the dollar now falling, we would expect industry to perform better,” Paul Ashworth, an economist at Capital Economics, told The Associated Press.
Most economists predicted slow growth in the third quarter of the year to an annual rate of about 1.5 percent to 2 percent, down from a 2.5-percent rate in the second quarter. Although the full economic impact of the government shutdown still being evaluated, it’s expected that the shutdown will restrict growth to a sluggish pace for the remainder of the year.
This and other economic data, as well as concerns relating to the 16-day government shutdow, are causing many to speculate that the Fed will maintain its $85-billion-a-month bond purchase stimulus program. That decision will be formally announced later today.
