The Federal Reserve said that manufacturing production edged up 0.1 percent in September, bouncing back ever-so-slightly from declines in each of the past two months. With that said, the data continue to reflect softness due to the hurricane-related reductions in activity from Hurricanes Harvey and Irma, and the Federal Reserve estimates that this subtracted 0.25 percentage points from growth in the month.
Beyond weather, we have seen a lot of volatility in the output data for the manufacturing sector since the spring—essentially seesawing from month to month since March. This has meant that production has grown been less than we would have desired or expected, especially given the more-robust outlook seen in other data sources. As a result, manufacturing production has risen by 1.0 percent over the past 12 months. While this is better than last year—when the year-over-year rate was -0.1 percent—we would prefer a faster pace of growth. Indeed, the year-over-year pace has drifted lower since April’s 1.8 percent pace.
Manufacturing capacity utilized was unchanged at 75.1 percent in September. Utilization rates have trended down since peaking at 76.0 percent in April, but capacity continues is slightly higher than the 74.9 percent rate seen at this time last year. Read More