Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Industrial production fell in September as capacity utilization dropped to a three-year low. There were mitigating factors at play, but it is emblematic of the dire straits in the manufacturing sector today that one-off factors can derail output rather than just slow it.
Industrial Sector Cannot Take a Punch
Industrial production fell 0.3% in September, reversing a gain of the same magnitude in August. Factor in a drop in output in July and the third quarter as a whole was a bust for industrial production, falling at an annual rate of 0.6% (chart).
There are some mitigating factors to consider here such as a strike at a major domestic aircraft manufacturer and the negative impact of hurricanes. The Federal Reserve reckons these factors together exerted an overall drag of 0.6% on September production.