U.S. industrial production fell 1.3% in September, much worse than expected and the worst drop since February.
The September data is disappointing, especially in the manufacturing sector where it looks clear that supply chain issues are continuing to weigh on activity. Economics Daniel Silver of J.P. Morgan said this in a note to clients.
The Federal Reserve reports Monday that nearly half the decline in total industrial production was attributable to Hurricane Ida.
It was the worst showing since February 1.1% decline, when severe winter storms hammered many of the nation, disrupting a wide swath of manufacturing activities from autos to chemical plants.
Industrial production combines manufacturing, utilities and mining. The government said manufacturing output fell 0.7%, dragged down by a 7.2% drop in motor vehicles and parts as shortages of semiconductors continued to thwart the industry. Export of factories globally fell 0.3%, the government said.
The Fed also revised August s reading down from a 0.4% gain to a 0.1% decline.
The most recent supply chain disruption has affected every industry, while the decrease is also impacting every industry – local and countrywide. Department of Secretary Pete Buttigieg said that the supply chain crisis will likely continue through 2017 and affect the holiday season.
Some of the challenges that we have been experiencing this year will continue into next year, Buttigieg said in CNN s State of the Union. What is happening isn t just the demand side, it s the supply side. Demand is on the ups and downs. Retail sales are getting in the roof. If you think about those images of ships, for example, waiting at anchor on the West Coast every one of those ships is full of record amounts of goods that Americans are buying because demand is up because income is higher because president has successfully guided this economy out of the teeth of a terrifying recession.