U.S. industrial output picked up modestly in September, a sign a key sector of the economy is weathering the hurricane-related disruption that hit the prior month.
Industrial production -- a measure of output at factories, mines and utilities -- increased a seasonally adjusted 0.3% in September from the prior month, the Federal Reserve said Tuesday. The reading was in line with economists' expectations.
Continue Reading Below
Tuesday's report estimated Hurricanes Harvey and Irma held down the growth in total industrial production in September by 0.25 percentage point.
A decline in industrial production in August was revised upward, suggesting storm-related disruptions were less severe than initially reported. Production slipped 0.7% that month instead of the first estimate of 0.9%. Industrial output was up 1.6% on the year to September.
"Hurricane effects may continue to suppress activity in the near term, but there will be a snapback before long, with the net result probably being little different than it would otherwise have been," Joshua Shapiro, an economist at MFR, Inc., said in a note to clients.
Capacity utilization, reflecting how much industries are producing relative to their potential output, rose by 0.2 percentage point to 76.0% in September; economists had expected 76.3%.
Output at U.S. factories rose 0.1% in September and mining output increased 0.4%. Utility production rose 1.5%.
"The bottom line is that the figures are distorted, for both August and September, though there is reason to think that we should get back to something close to normal in October," economist Stephen Stanley of Amherst Pierpont Securities wrote to clients.
In September 2005, industrial production fell sharply after Hurricane Katrina devastated New Orleans, but it recovered in subsequent months.
Hurricane Harvey, which hit Texas in late August, and Irma, which hit Florida in early September, have muddied economic readings in recent weeks.
While the storm impact dented August's industrial output, the Institute for Supply Management's closely watched index of manufacturing activity reached a 13-year high in September, as strong demand and order growth rode out the severe hurricane season.
Meanwhile, the Labor Department said earlier this month that the U.S. shed 33,000 jobs in September, ending the longest stretch of job growth on record.
Write to Harriet Torry at email@example.com
(END) Dow Jones Newswires
October 17, 2017 10:29 ET (14:29 GMT)