September industrial production fell 1.3% after moving down a revised 0.1% in August, said the Federal Reserve Bank Monday in its Industrial Production and Capacity Utilization report.
August output previously was reported to have risen 0.4%.
SEPTEMBER OUTPUT DOWN
September manufacturing output decreased 0.7%, the Bank said. Production of motor vehicles and parts fell 7.2%, as shortages of semiconductors continued to hobble operations, while factory output elsewhere declined 0.3%.
The output of utilities dropped 3.6%, as demand for cooling subsided after a warmer-than-usual August.
Mining production fell 2.3%; lingering effects from Hurricane Ida more than accounted for the drop, the Bank said. Parts shortages and the hurricane also contributed 0.3 percentage point to the drop in manufacturing. Overall, about 0.6 percentage point of the drop in total industrial production resulted from the hurricane.
Despite September’s decrease, total industrial production rose at an annual rate of 4.3% for the third quarter, its fifth straight quarter with a gain of at least 4%, the Fed said.
At 100.0% of its 2017 average, September’s total industrial production was 4.6% above its year-earlier level, the Bank said. Capacity utilization for this sector fell 1.0 percentage point to 75.2%, a rate that was 4.4 percentage points below its 1972–2020 average.
MARKET GROUPS
Much of the weakness in September’s production came from large decreases in consumer goods and materials, the Fed said. Business equipment, defense and space equipment and construction supplies recorded small gains, while business supplies recorded a small loss.
The index for consumer goods fell 1.9%, with large declines in durables, particularly automotive products and consumer energy products, the Bank said. Likewise, the index for materials dropped 1.7%; chemical and energy materials posted decreases of more than 3% because of prolonged hurricane-related outages for industries concentrated near the Gulf.
INDUSTRY GROUPS
September manufacturing output fell 0.7%, but the annual index rose 5.3% in the third quarter, the Fed said. Durable goods production decreased 0.5%, with a drop of 7.2% for motor vehicles and parts.
Outside of motor vehicles and parts, durables production moved up 0.5%, as gains of 1% or more were posted by primary metals; electrical equipment, appliances and components; aerospace and miscellaneous transportation equipment; furniture and related products, and miscellaneous manufacturing, the Bank said.
Nondurable goods output fell 1.0%, the Fed said. The largest increases were recorded by printing and support and by textile and product mills, while the largest decreases were recorded by chemicals and by petroleum and coal products.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $124.00 to $125.24 per cwt, compared with last week’s range of $123.12 to $125.00. FOB dressed steers and heifers went for $194.63 to $196.35 per cwt, versus $193.39 to $196.04.
The USDA choice cutout Tuesday was up $0.79 per cwt at $280.88, while select was up $1.72 at $261.53. The choice/select spread narrowed to $19.35 from $20.28 with 126 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were up $0.05 to $0.07 at $1.15 to $1.27 a bushel over the Dec futures and for southwest Kansas were unchanged at $0.40 over Dec, which settled at $5.30 1/4 a bushel, down $0.02 1/2.
Eight heifer and two steer contracts were tendered for delivery Tuesday against the Oct live cattle contract. One heifer contract was retendered at two.
The CME Feeder Cattle Index for the seven days ended Monday was $154.10 per cwt up $0.20. This compares with Tuesday’s Oct contract settlement of $155.10 per cwt, down $0.65.