US industrial production likely to contract in September

Reduced mining activity, combined with broad-based cutbacks in factory output, likely pared the Federal Reserve Board's industrial production gauge by 0.3% in September, after a 0.4% decline in the previous month. Reflecting anticipated reductions in coal, oil and gas extraction, aggregate mining output probably dropped by 1.6% - the largest falloff since May. 

Consistent with the ISM's corresponding barometer, manufacturing production is expected to have dipped by 0.2% last month, following a 0.5% contraction in August. Utilities are forecasted to be the one bright spot in this week's report, with warmer temperatures during the first half of September prompting a 0.7% gain. 

If the above projections are on the mark, industrial production expanded by 1.4% annualized during Q3, bouncing back partially from the spring's mining- and utilities-led 2.6% decline. With additions to productive capacity eclipsing output gains during the reference period, the overall operating rate likely retreated to 77.3% - the lowest reading since February 2014.