WASHINGTON, Oct 16: US industrial production plunged a shock 2.8 per cent in September, the steepest fall in 34 years, due to hurricanes in the Gulf of Mexico and a strike at Boeing, the Federal Reserve said on Thursday.

Hurricanes Gustav and Ike, which hammered the Gulf of Mexico region, a key hub of the US oil and gas industries, and a machinists strike at Boeing that has crippled civilian aircraft production, “severely curtailed output,” the central bank said.The plunge in output far exceeded analysts’ consensus forecast of a scant 0.8 per cent decline. It was the strongest fall since December 1974.

The Fed estimated the disruptions from the hurricanes on total output contributed some 2.25 percentage points to the decline.

“In addition to reductions in oil and gas extraction, hurricane-related shutdowns of petroleum refineries and petrochemical producers factored significantly in the decline; other manufacturing industries with storm outages made smaller contributions to the drop in output,” it said.

The ongoing machinists’ union strike at Boeing, begun on September 6, contributed an estimated half percentage point to the overall decrease in industrial output.

RDQ Economics analyst John Ryding rejected the Fed arguments that the freefall was due to the hurricanes and Boeing strike.—AFP