U.S. industrial production rises at 4% rate in 3Q

WASHINGTON – U.S. industrial production increased at an annual pace of 4.0 percent in the third quarter compared with the same three months of 2006, the Federal Reserve said in a statistical release today. That was a half-percentage point faster than the second quarter’s 3.5-percent growth rate.
In September, total U.S. industrial production increased 0.1 percent from its revised level the month before, to 114.4 percent of the 2002 average, after holding steady in August. Compared with September 2006, total production rose 1.9 percent.
A monthly rise of 0.1 percent had been expected to follow the 0.2-percent gain originally reported in August, according to the median estimate from a Bloomberg News survey of 80 economists. (Their projects ranged from a decline of 0.3 percent to an increase of 0.4 percent.)
Manufacturing-sector output rose 1.0 percent last month, erasing August’s revised 0.4-percent decline, the Fed report said. Utilities output dipped 0.1 percent after surging 4.6 percent the month before. Mining output rose 0.2 percent, rebounding from the previous month’s 0.6-percent decline.
Within manufacturing, a 0.4-percent increase in production of business equipment and 0.2 percent increases in materials and non-industrial supplies were partially offset by a 0.3-percent decline in consumer goods, led by motor vehicle production (-2.8 percent). Production of non-durable non-energy consumer goods increased 0.1 percent.
Capacity utilization – a measure of the proportion of industrial plants in use – was unchanged from August’s revised estimate of 82.1 percent, or 1.9 percentage points below the September 2006 level. But it remained 1.1 percentage points above the nation’s average utilization level from 1972 to 2006.
“Generally, the restraint in the numbers reflects the weakness in vehicles,” Mike Englund, chief economist at Action Economics LLC in Boulder, Colo., told Bloomberg News. “Exports are a huge contributor, and capital goods exports have been quite strong.”
Additional economic research data from the Federal Reserve, including the full Industrial Production and Capacity Utilization release is available from the Federal Reserve at www.federalreserve.gov.