US industrial production fell 1.3% in September as hurricanes Katrina and Rita and a strike at aircraft producer Boeing dented output, the Federal Reserve said today. It was the largest monthly drop since 1982 and worse than the 0.4% decline expected by private economists.
Capacity utilisation, a sign of slack in the industrial economy, fell to 78.6 in September from a revised 79.8 in August.
Production of business equipment, materials and especially mining were hardest hit by the storms, the Fed said. Mining output - which includes oil and gas production - slumped 9.1%, driven by drop-offs in the Gulf of Mexico.
Business equipment production fell 3.7% and materials fell 2.1%. Only output of construction supplies and consumer goods rose in September, reflecting rebuilding efforts for the hurricanes that devastated much of the Gulf Coast.
Industrial production is up 2% in the past 12 months. In September, manufacturing output dropped 0.5%. Production of motor vehicles and parts rose 2.2% in September after gaining 3.1% in August.
* Separate figures today from the US Commerce Department showed that US retail sales rose 0.2% in September as high petrol prices offset slumping car sales.
Car sales were weak in September, falling 2.8%. Excluding cars, sales increased 1.1%. Excluding petrol, sales fell 0.2%.
Ahead of the report, economists were expecting a 0.5% rise in retail sales, with a 0.8% increase in sales excluding motor vehicles.
The government said it could not estimate the impact of hurricanes Katrina and Rita on retail sales, saying there were both negative and positive effects.
