Industrial output slipped 0.2 per cent after a revised 0.1 per cent dip in August, the Federal Reserve said on Friday.

Economists forecast that industrial production fell 0.3 percent in September, according to Econoday.

Manufacturing output, the biggest component of industrial production, fell 0.5 percent in August, the most in 19 months, because of a sharp fall in auto output.

The Fed report also showed capacity utilization, which measures the amount of a plant that is in use, decreased to a three-month low of 77.5 percent from 77.8 percent the prior month.

Falling oil prices have also dragged down factory output. Warmer temperatures last month pushed up the output of electric utilities, as demand for air conditioning offset the lesser need for gas utilities and heating.

From a year earlier, overall industrial production was up 0.4% and factory output was up 1.4%. Mining production fell 2.0 per cent as oil and gas well drilling tumbled 4.0 per cent after increasing for two straight months.

The effects of the global slowdown have intensified in recent months amid growing concerns about the health of China and other emerging-market economies.

US manufacturing production fell for the second straight month in September as factories cranked out fewer appliances, computers, and electronics.

The outlook for manufacturing isn’t entirely negative.

For the third quarter as a whole, total industrial production rose at an annual rate of 1.8%, and manufacturing output increased 2.5%.

A surge in the dollar since mid-2014 has made USA products more expensive in foreign markets at the same time the oil industry cuts back and companies contend with bloated stockpiles. Slower growth and low inflation have diminished expectations of an interest rate hike from the Fed this year. Growth is expected to rebound slightly in the final months of the year to around a 2% pace.