WASHINGTON – Factory production in the U.S. rose less than forecast in September, indicating a pause in manufacturing leading into the budget battle that partially closed the federal government.
Output at factories rose 0.1 percent after a revised 0.5 percent gain in August that was smaller than initially estimated, figures from the Federal Reserve showed today in Washington. The median forecast of economists in a Bloomberg survey called for a 0.3 percent September gain. Total industrial production, which also includes output by mines and utilities, advanced 0.6 percent as higher temperatures drove up electricity use.
The figures showed declines in production of such non- durable goods as chemicals and textiles, while output of autos and business equipment rose. An acceleration in manufacturing, which accounts for about 12 percent of the economy, depends on whether corporate confidence improves in wake of the partial government shutdown that lasted for half of October.
“We are in a kind of status-quo, muddle-along mode,” Eric Green, global head of foreign exchange and rates at TD Securities USA LLC in New York, said before the report. “You’ve also had a bit of a hiccup here in terms of business confidence” because of the budget battle in Washington, he said.
Stock-index futures were little changed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in December falling less than 0.1 percent to 1,753.3 at 9:19 a.m. in New York.
The median forecast in a Bloomberg survey of 85 economists called for a 0.4 percent advance in September industrial production. Estimates ranged from a drop of 0.3 percent to an increase of 0.8 percent. Manufacturing, which accounts for about 75 percent of total production, was previously reported as rising 0.7 percent in August.
Factory production in China has shown signs of picking up. Industrial output in September climbed 10.2 percent from the same month last year, according to Oct. 18 figures from the Beijing-based National Bureau of Statistics. In June, the year-over-year increase was 8.9 percent.