Industrial production rose 0.7% in September, with utilities up 3.5%

U.S. industrial production rose 0.7% in September, but the largest increase was in utilities, not factories, the U.S. Federal Reserve said Friday. The gain was above the 0.4% consensus from Econoday, a service that surveys forecasters on economic data, and above a forecast range of 0.1% to 0.6%. The report was released at 9:15 a.m. Eastern time.

Utility output rose 3.5%, with gains in both electric and natural gas utilities. Manufacturing rose 0.3%, matching that survey's forecast, and mining rose 0.2%.

The headline beat did not come from factories.

Durable goods output rose 0.1%. Gains of 1% or more in primary metals, machinery and electrical equipment, appliances and components were offset by a 3% drop in motor vehicles and parts.

The third quarter had the same split. Industrial production rose at a 2.8% annual rate, the three-month pace stated as if it lasted a year. Utilities rose at a 14.8% annual rate, and manufacturing at a 0.7% annual rate.

Capacity utilization rose to 76.9% from a revised 76.4% in August, above the 76.5% the survey expected. The rate is still 2.5 percentage points below its long-run average of 79.4% for 1972 to 2025.

August industrial production, reported as unchanged on September 18, was revised to a 0.1% increase.

September production was 2.2% above its year-earlier level.