The output of America's factories, mines and utilities rose in September as the damage of Hurricanes Harvey and Irma on the Gulf Coast and Florida subsided and rebuilding brought business and utilities back on line.
U.S. industrial production climbed 0.3 percent last month and August's 0.9 percent decline was revised upwards to -0.7 percent, reported the Federal Reserve on Tuesday. Economists in the Reuters survey had forecast a 0.2 percent gain for September. The initial 0.4 percent improvement in July’s output was revised down to a 0.1 percent loss.
Industrial production for August and September was heavily affected by Hurricane Harvey which came ashore in southern Texas on August 25th as a powerful category 4 storm and then struck Louisiana four days later.
Much of the U.S. oil and gas drilling in the Gulf of Mexico and refineries and chemical plants on the coast and in the Mississippi Valley were temporarily shut down or damaged. The Federal Reserve estimated that Harvey and to a lesser extent Irma later in September reduced industrial production by 0.25 percent in September.
In the third quarter the Fed reported that industrial production fell at a 1.5 percent annual rate. However, minus the hurricanes the index would have risen at least 0.5 percent.
The industrial sector in the Federal Reserve's gauge comprises manufacturing, mining, which includes oil and natural gas drilling and production, and electric and gas utilities.
Factory production which makes up about 12 percent of the U.S. economy and is often treated as a leading indicator for economic activity, climbed 0.1 percent in September after declining a revised 0.2 percent in August which was slightly improved from its original -0.3 percent reading.
Utility output gained 0.4 percent i September, oil and gas drilling dropped 2.8 percent. Consumer goods production rose 0.5 percent and business equipment increased 0.8 percent. Construction activity added 1.9 percent, the first increase since April.
Capacity utilization, the measure of the total industrial plant in use, rose 0.2 percent to 76.0 percent. The median estimate was 76.2 percent. August's initial score of 76.1 percent was revised down to 75.8 percent.
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