Manufacturing PMIs have surged over the past few months, showing a clear breakout V-shaped recovery that has put the indexes of sentiment at the highest levels since 2018, but the hard numbers continue to lag.
Driving the news: The Fed's index of industrial production, which tracks output at factories, mines and utilities, fell a seasonally adjusted 0.6% last month after consistent increases since May, and output remains 7.1% below where it was in February.
Why it matters: PMI reports, especially in the manufacturing sector, are major indicators economists have pointed to as proof the economy is recovering quickly.
Details: Manufacturing, the biggest component of production, fell 0.3%, after rising 1.2% in August.
- Utility production fell 5.6% due to a decline in air conditioning use.
- Mining output rose 1.7%.
- Capacity utilization, a measure of slack in the industrial economy, fell to 71.5% in September from a revised 72% in August. Economists forecast capacity utilization would rise to 71.8%.
My thought bubble: The tea kettle spout shape of a quick bounceback and decline seen in the chart of manufacturing industrial production is eerily similar to the shape of other U.S. data points, most notably employment.