October 17, 2019 / 1:31 PM / a month ago

U.S. manufacturing production falls in September, hurt by GM strike

WASHINGTON, (Reuters) - U.S. manufacturing output fell more than expected in September, hampered by a strike at General Motors, and the outlook for factories remained weak amid slowing global growth and unresolved trade tensions.

The Federal Reserve said on Thursday that manufacturing production fell 0.5% last month after an upwardly revised 0.6% rise in August. Excluding motor vehicles and parts, overall industrial production and manufacturing output still fell 0.2%.

Economists polled by Reuters had forecast manufacturing output would decline 0.2% and industrial output would slip 0.1% in September. Production at factories dropped 0.9% in September on a year-on-year basis.

The Fed’s measure of the industrial sector comprises manufacturing, mining, and electric and gas utilities. Industrial output declined 0.4% in September after an upwardly revised gain of 0.8% in August as a result of the manufacturing softness and drop in mining production.

The manufacturing sector, which makes up about 11% of the U.S. economy, has been weakened by a 15-month trade war between the United States and China, which has hurt business confidence and investment.

A separate survey of the sector released earlier this month showed manufacturing activity fell to a 10-year low in September as trade tensions weighed on exports.

U.S. President Donald Trump last Friday outlined the first phase of a deal to end the trade war with China and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.

With overall output declining, the percentage of industrial capacity in use decreased 0.4 percentage point to 77.5 in September from an unrevised 77.9 in August.

Reporting by Lindsay Dunsmuir; Editing by Paul Simao

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