The industrial sector has been undermined by a slowing global economy and resurgent dollar, which have eroded demand for U.S. manufactured goods. It is also being weighed down by lower energy oil prices that have undercut capital investment in the energy sector, as well as a so-called inventory correction.
The weak industrial production report added to soft trade, retail sales and employment data that have suggested a significant slowdown in growth after the economy expanded at a 3.9 percent annual pace in the second quarter.
Third-quarter growth estimates are currently below a 1.5 percent rate. Slower growth and low inflation have diminished expectations of an interest rate hike from the Fed this year.
Manufacturing output fell 0.1 percent even though robust demand for automobiles lifted motor vehicle and parts production 0.2 percent. Manufacturing output dropped by a revised 0.4 percent in August, which was previously reported as a 0.5 percent drop.
For the third quarter, manufacturing output increased at a 2.5 percent rate.
There were declines in the production of computer and electronic products, as well as electronic equipment, appliances and components. Primary metals and machinery output increased.