Industrial Production and Capacity Utilization numbers are out for September 2009. Industrial production increased 0.7%, which is down from a 1.2% increase in August.

On Q3 2009, things are looking better:

For the third quarter as a whole, output advanced at an annual rate of 5.2 percent, the first quarterly gain since the first quarter of 2008 and the largest gain since the first quarter of 2005.

Total industrial production is still down 6.1% from it's September 2008 level.

Capacity utilization is now 70.5%, up 0.6% from last month but still down 4% from September last year.

When referring to inflationary pressures and the above report, EconomPic Data quotes this statement by the St. Louis Fed President:

at a recent St. Louis Fed conference, Bank president James Bullard offered a somewhat contrary view-namely that the collapse of the bubble has eradicated some of the productive capacity of the economy, thus rendering the output gap smaller than commonly believed.

So, in other words this financial implosion destroyed total productive capacity so now the ratio looks better and also might put inflationary pressures on the U.S. sooner.

Ouch.

In briefly scanning the below chart, one can see a dip in total capacity.