U.S. industrial output fell unexpectedly in September, raising concerns that a slowdown in the primary driver of the economy will hit the economic recovery. Industrial output decreased by 0.2 percent in September after gaining 0.2 percent in August, the Federal Reserve data showed on Monday. Markets had expected a 0.2 percent increase in the U.S. factory output in September.
The indices for manufacturing output and manufacturing excluding motor vehicles and parts dropped by 0.2 percent in September. Capacity utilization, a measure of how fully firms employ their resources, also slipped to 74.7 percent in September. The market consensus was 74.8 percent.
In the third quarter, total industrial production rose at an annual rate of 4.8 percent after recording 7 percent growth in the previous quarters of this year. While the production at mines rose by 0.7 percent, utilities output fell by 1.9 percent.
Output of business equipment edged up by 0.1 after gaining 0.7 percent in August. Production of automotive products slipped by 1 percent in September. Consumer goods output continued to fall in September for the second consecutive month, and was down by 0.4 percent. However, the output of home electronics rose by 0.6 percent.
Paul Ashworth, senior US economist at Capital Economics, said the data suggests that "the previously robust recovery in the factory sector is definitely behind us now and this could even be the start of a renewed downturn."
