US industrial output surprises to the downside in September
Industrial output in the US missed economists' forecasts by a mile in September amid a slump in output of automobiles and computers.
The Department of Commerce said that total output shrank at a month-on-month pace of 0.6% last month, instead of rising by the same amount as the median projection of the consensus had anticipated.
Weakness was concentrated in production of autos parts, which were down by 4.0% on August, and in that of computers, which fell by 2.9%.
Yet strip out autos and parts, and industrial production was flat on the month.
Total output just from manufacturing was 0.3% lower on the month (consensus: 0.8%), that from utilities 5.6% lower and that from mining up by 1.7%.
The degree of capacity utilisation meantime slipped from 72.0% for August to 71.5% in September.
Furthermore, as Ian Shepherdson, chief economist at Pantheon Macroeconomics pointed out, the latest data was hard to square with the retail sales numbers for car sales which had published just 45 minutes earlier, which had revealed a jump in sales, as well as with rising orders for durable goods.
Hence, Shepherdson said: "we doubt these declines mark the start of a sustained downward trend. We’re inclined to believe the survey evidence suggesting that the manufacturing recovery continues, albeit at a much less explosive pace than in the early summer.
"At the headline level, total production in September was hit by a weather-related 7.3% drop in utility output; expect a rebound in October."
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