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16 Oct, 2020 14:54

US industrial output surprises to the downside in September

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Recurso FordFORD - Archivo

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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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.