Industrial Production Rises
Oct. 17, 2000
WASHINGTON (AP) _ Industrial production at the nation's factories mines and utilities rose modestly in September as output of consumer goods, including household appliances and home electronics, showed sizable gains.
Output rose 0.2 percent last month, the Federal Reserve said Tuesday in its latest snapshot of the industrial sector. Many analysts were expecting industrial production to decline by 0.1 percent.
However, for the third quarter, total industrial production rose at an annual rate of 2.8 percent, the slowest pace since the first quarter of 1999, suggesting that the Fed's string of interest-rate increases are working to slow economic growth.
In September, production of consumer goods rose a brisk 0.8 percent after having edged up a slim 0.1 percent the month before. Production of home appliances and air conditioners rose 6.2 percent last month after a 1 percent decline.
Output of home electronics grew by 4.9 percent last month, following a 0.3 percent increase.
Production of cars and trucks, meanwhile, rose 1.1 percent in September, down from a 4.4 percent rise the month before. For the third quarter as a whole, car and truck assemblies were running well below the second quarter rate, the Fed said.
The Federal Reserve has boosted interest rates six times since June 1999 to slow the economy to a more sustainable pace and to keep inflation under control. The Fed's rate increases are designed to make borrowing more expensive and cool demand for big-ticket items such as cars and homes.
With a spate of economic reports providing evidence of moderating economic growth, many analysts believe the central bank will leave interest rates unchanged for the rest of the year.
The report also showed that output at utilities in September rose a solid 0.7 percent, down from a sizzling 3.6 percent gain in August, when warmer-than-normal weather boosted demand for electricity. Output at mines fell a sharp 1 percent after showing a flat read the month before.
Meanwhile, operating capacity at the nation's factories, mines and utilities was unchanged at 82.2 percent in September, in line with analysts' expectations. August's figure was revised down a notch to 82.2 percent from the 82.3 percent capacity figure reported one month ago.
September's operating capacity was below levels usually associated with a pickup in inflation.
Generally, an operating capacity of 84 percent would alarm economists, indicating that factories just can't produce fast enough _ which would lead to price increases.
In August, total industrial production rose 0.4 percent, according to revised figures, slightly stronger than the 0.3 percent rise the Fed previously estimated.