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The Bloomberg consensus was a decline of 0.1 percent. Factoring in negative and positive revisions the decline was about 0.5 percent.

Blame the Hurricanes

The Fed blames the hurricanes in its September Industrial Production Report.

Industrial production (IP) decreased 0.3 percent in September after advancing 0.3 percent in August. A strike at a major producer of civilian aircraft held down total IP growth by an estimated 0.3 percent in September, and the effects of two hurricanes subtracted an estimated 0.3 percent. For the third quarter as a whole, industrial production declined at an annual rate of 0.6 percent. Manufacturing output moved down 0.4 percent in September, and the index for mining fell 0.6 percent. The index for utilities gained 0.7 percent. At 102.6 percent of its 2017 average, total industrial production in September was 0.6 percent below its year-earlier level. Capacity utilization edged down to 77.5 percent in September, a rate that is 2.2 percentage points below its long-run (1972–2023) average.

I suppose that hurricane story makes some sense, but then last month’s story doesn’t.

On September 17, I reported Industrial Production Rises Strongly from Steep Negative Revisions

In August, Industrial Production jumped a reported 0.8 percent. Today we see that the strong rebound in August was really only 0.3 percent.

However the Fed did take away some of the steep negative revisions to July.

We have had substantial revisions and not all of them are hurricane related.

Industrial Production Since 1999

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Industrial production is now a mere 0.35 percent above the level in December 2007. Industrial production peaked in September of 2018 at 104.10.

Manufacturing production is 6.3 percent below the level in December 2007. A recession started in January 2008.

December of 2007 is still the all-time high for manufacturing.

Retail Sales

This morning I commented Retail Sales: Consumers Spend More on Food, Less on Gasoline and Cars

In September, retail sales rose 0.4 percent, up 0.3 percent inflation adjusted. Here’s where consumer spent their money.

Please check it out.

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