Input Stories

Industrial production and retail sales drifted in opposite directions in September, with the former encountering a slight dip and the latter rising (Reuters and The Wall Street Journal, both subscription).

Production falls: Industrial output fell 0.3% in September from a month earlier—slightly more than an expected 0.2% drop.

Zooming out: Industrial production dropped 0.6% year-on-year and fell at an annualized rate of 0.6% in the third quarter. Factory output fell 0.4% in September, while factory production on a year-on-year basis was down 0.5%.

Zooming in: “Motor vehicle and parts output dropped 1.5% last month, while production of aerospace and miscellaneous transportation equipment plunged 8.3%. … Durable manufacturing production dropped 1.0%. Nondurable manufacturing production increased 0.2%. Mining output fell 0.6% last month after rising 0.7% in August. Utilities production rebounded 0.7% after a 1.3% decline.”

Strikes and hurricanes: According to the Federal Reserve, industrial production was weighed down last month by twin challenges: the 33,000-worker strike at Boeing, which has had ripple effects on the aircraft company’s supply chain, and two significant storms: Hurricanes Helene and Debby.

• The Fed estimated that the Boeing strike hampered growth in industrial production by 0.3%, and that the two storms subtracted another 0.3%.

Spending rises: Meanwhile, spending by U.S. shoppers increased 0.4% in September, slightly outpacing forecasts that had suggested a 0.3% increase and accelerating beyond the 1% growth that the same metric had seen in August.

• Restaurants, bars and clothing stores did especially well—encouraging news as economists look out for signs that consumers might be cutting back. 

The big picture: Overall, the view is of a fairly resilient economy—cooling slightly, perhaps, but still robust.