US industrial output rises 0.7% in September, capacity utilization holds at 76.9%
Capacity utilization held at 76.9%, adding a hard output number to a Fed debate that has so far run on inflation data and rhetoric alone
Published
Chart: US industrial production, change on the month
Industrial production rose 0.7% in September, the Federal Reserve's official release showed. Capacity utilization for the month came in at 76.9%, a figure that points to factory activity holding up rather than cracking under higher interest rates.
The release lands in the middle of a split among Fed officials over how much further to tighten policy. Cleveland Fed president Hammack, Chicago Fed president Goolsbee and Boston Fed president Collins have argued for more restriction, while Fed governor Bowman and Richmond Fed president Barkin have said they want to wait on more data before deciding. Hammack has said financial conditions do not look restrictive, an argument for pushing rates higher still.
Goolsbee has taken a more cautious line on inflation even while favoring tighter policy, calling the September CPI report discouraging and warning of overheating risk tied to AI-driven investment. Barkin has said inflation is running higher than he had hoped and declined to say how he will vote at the Fed's October meeting.
A solid production gain backs the view, pressed by Hammack and others, that the economy remains strong rather than at risk of a slowdown, which is the case Goolsbee has made separately for caution. The September numbers do not settle the argument between the two camps, but they take away one point the patience camp could have used for easing: a growth scare is not showing up in this release.