U.S. industrial production likely to have dropped again in September, says Wells Fargo

Production output at U.S. factories, utilities and mines dropped in August following the Hurricane Harvey that hit the Gulf Coast. In August, the industrial output had dropped 0.9 percent. Industrial production is expected to have fallen again in the month of September, noted Wells Fargo in a research report. The hurricane was estimated to have lowered the monthly change in industrial production by around three-quarters of a percentage point.

An increase in durables output in the manufacturing sector was not sufficient to counter outages at refineries, chemical plants and plastics factories. Meanwhile, mild weather weighed heavily on utilities output.

Given that Hurricane Irma hit the nation two weeks later, an additional drop is expected in September. Power outages in Florida are expected to have been a drag on utilities output, whereas the ISM supplier delivery index implies that production disruptions continued in September. According to Wells Fargo, industrial production in the U.S. is expected to have dropped 0.6 percent in September; however, it is likely to recovery significantly in October.

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