Industrial production falls 0.2% in Sept.
Associated Press
WASHINGTON
Sluggish spending by businesses and consumers is causing factories to cool their production after they helped lift the economy out of recession.
Companies have slowed their rebuilding of stockpiles and replacement of worn-out equipment. And consumers are spending cautiously at a time of 9.6 percent unemployment and slow job growth. That combination led to the first decline in output at the nation’s mines, factories and utilities since the recession ended in June 2009.
Factory output, the largest element of industrial production, fell 0.2 percent in September, the Federal Reserve said Monday. So did overall industrial production.
In the year after the recession ended, manufacturing surged ahead at an 8.8 percent annual rate. That was the strongest year-over-year gain since the 1983-84 economic recovery. But the growth has been more or less flat over the past two months.
Without consumer demand to take up the slack, industry can’t maintain its strong growth.
A separate report Monday showed the nation’s homebuilders are pessimistic about the housing market. That’s true even though many are seeing a little more foot traffic after the worst summer for home sales in a decade.
The National Association of Home Builders said its monthly index rose slightly to 16. It’s the first increase in five months. But the index remains far below 50, the dividing threshold between positive and negative sentiment about the market. The last time the index was above 50 was in April 2006.