September Sees a Decline in US Manufacturing Output

In September, US Manufacturing experienced a contraction of 0.4% MoM, a significant decrease compared to the anticipated 0.1% decline. This resulted in a 0.5% YoY decrease in manufacturing output.

Impact on US Industrial Production

This contraction in manufacturing output contributed to a 0.3% MoM and -0.6% YoY decline in US Industrial Production, marking the weakest performance since April. The figures for August were also revised downwards.

Contributing Factors

The Federal Reserve stated that a strike by aircraft machinists reduced industrial production by an estimated 0.3%. Similarly, the effects of hurricanes Helene and Francine also decreased production by approximately the same amount. During the month, aerospace equipment production plummeted by 8.3%. In addition, Capacity Utilization fell to 77.5%.

Changes in Other Sectors

The mining and energy extraction sector saw a 0.6% decrease, while utilities output increased for the first time in three months.

Implications

These figures raise questions about the state of the economy. Are we looking at a 'no landing' economy? Or are these changes just 'transitory'?

Bottom Line

The significant contraction in US manufacturing output in September, coupled with the decline in industrial production, raises important questions about the future of the economy. What are your thoughts on these developments? Do you think these changes are temporary or indicative of a more significant trend? Share your thoughts and this article with your friends. Remember, you can sign up for the Daily Briefing, which is delivered every day at 6pm.