WASHINGTON (AP) _ Demand for electricity, trucks, computers and aircraft boosted the nation’s industrial production in September. Construction starts of new homes jumped sharply too.
Output at the nation’s factories, mines and utilities jumped an unexpectedly large 0.7 percent last month, the Federal Reserve said today. That pushed the U.S. industrial operating rate to 84.4 percent of capacity, the highest since February 1995.
The increase, from 84.1 percent, normally would be a warning signal of inflation, except much of it was concentrated at electricity plants and was probably temporary.
Separately, the Commerce Department said housing starts jumped 7.9 percent to a seasonally adjusted annual rate of 1.5 million, following drops in August and July. All regions of the country posted gains.
Much of the strength in industry came from a 4.4 percent surge at utilities, pushing the operating rate to 91.2 percent from 87.4 percent. Demand for electricity rebounded after decreasing in August, when unseasonably cool weather held down air conditioning use.
Manufacturing production increased a moderate 0.4 percent, raising the operating rate slightly, to 83.4 percent, from 83.3 percent. In addition to light trucks, computers and commercial aircraft, output increased for semiconductors, clothing, paper, textiles and chemical products. That offset drops in production of consumer appliances and industrial machinery.
Mining production fell 0.5 percent because of declines at coal mines and oil and gas wells.
In advance, economists were expecting somewhat smaller gains in both housing starts and industrial production. And, the housing number sent tremors through the bond market, pushing yields on the benchmark 30-year Treasury bond to 6.42 percent from 6.39 percent Thursday.
Still, the larger increase doesn’t shake analysts belief that housing construction, while strong, won’t quite match last year’s eight-year high of 1.48 million. So far this year, starts are running 2.2 percent below last year.