Macro Flash Report

Industrial Production (YoY% Green/Red)

Takeaway:
September Industrial production came in below expectations, as high borrowing cost continue to negatively impacted activity, along with Hurricane Helene. Although the first (jumbo) interest rate cut has already occurred, the lack of clarity on the pace going forward will likely delay the eventual benefits.

In September, Industrial Production declined -0.3% month-over-month, a sharper fall than the market expected -0.1% and following a downwardly revised 0.3% increase in August. This more-than-anticipated downturn was primarily driven by the Boeing strike, which reduced total growth by an estimated 0.3%, and the impacts of hurricanes Helene and Milton, which also shaved off an estimated 0.3%.
Year-over-year, production contracted by -0.6%, the largest decline in five months, and after a downwardly revised -0.2% fall in August.

Capacity Utilization ticked down to 77.5% in September, an eight-month low, from a downwardly revised 77.8% in August and missing the forecasted 77.9%. This rate is 2.2 percentage points below the long run average.

Manufacturing (SIC) Production, which comprises 78% of total industrial production, declined -0.4%, exceeding the anticipated -0.1% decrease and down from the downwardly revised 0.5% advance in August.
Annually, production dropped -0.5%, the lowest since April and following a revised flat reading in August.
Capacity Utilization edged down to 76.7% from 77.1%, 1.6 percentage points below its long-run average.
• Durable goods manufacturing fell by -1.0%, whereas production of nondurable goods increased by 0.2%.