US Industrial Production Dropped In September As Supply Chain Bottlenecks Plagued The Auto Industry
U.S. industrial production declined in September as supply chain bottlenecks in the auto industry and lingering effects of Hurricane Ida impacted manufacturing and mining output, according to data released by the Federal Reserve on Monday.
Industrial production dropped by 1.3% in September after falling just 0.1% in August, according to data released by the Federal Reserve. September’s decline represents is the sharpest monthly drop in production since February, when inclement weather in the South and central U.S. limited factory use, The Wall Street Journal reported.
Manufacturing output fell 0.7% in September compared to August, with motor vehicle production dropping 7.2% amid shortages of semiconductors, according to the Federal Reserve.
Hurricane Ida also contributed to a 0.3% drop in manufacturing, according to the Federal Reserve.
Experts believe that supply chain bottlenecks will continue to negatively impact the U.S. economy throughout 2022, according to the WSJ. Nearly 50% of the economists surveyed by the WSJ estimate that most of the current supply chain problems will last until the second half of 2022.
Experts also see average inflation of 5.25% in December, according to the WSJ. If inflation remains at its current 5.4% year-over-year increase, Americans will experience the longest period where inflation stayed above 5% since January 1991.
“It’s a perfect storm: supply-chain bottlenecks, tight labor markets, ultra-easy monetary and fiscal policies,” Michael Moran, Daiwa Capital Markets America’s chief economist, told the WSJ.
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