Production at U.S. factories fell by the most in seven months in September as an ongoing global shortage of semiconductors depressed motor vehicle output, further evidence that supply constraints were hampering economic growth.

Manufacturing production last month was also weighed down by the lingering effects of Hurricane Ida, which also severely disrupted output at mines. The report from the Federal Reserve on Monday followed on the heels of data last week showing a solid rise in inflation in September. Though retail sales rose last month, that reflected higher prices for motor vehicles.

"While the hurricane disruption and weather effects will fade, labor and product shortages are still worsening, which will continue to weigh on manufacturing output over the coming months and quarters," said Michael Pearce, a senior U.S. economist at Capital Economics in New York.

Manufacturing output dropped 0.7 percent last month, the largest decline since February. Data for August was revised down to show production falling 0.4 percent instead of rising 0.2 percent as previously reported. It was only the second time since April 2020, when mandatory closures of nonessential businesses were enforced to slow the first wave of COVID-19 infections, that manufacturing output fell for two straight months.

Economists polled by Reuters had forecast manufacturing production edging up 0.1 percent. Output increased 4.8 percent compared to September 2020. Manufacturing, which accounts for 12 percent of the U.S. economy, remains underpinned by businesses desperate to replenish stocks after inventories were drawn down in the first half of the year amid strong demand for goods.

Spending shifted to goods from services over the course of the pandemic, straining supply chains. The rotation back to services, such as travel and dining out, has been slowed by a resurgence in coronavirus infections over the summer, driven by the Delta variant.

Production at auto plants tumbled 7.2 percent after dropping 3.2 percent in August. The global shortage of microchips is forcing automakers to cut production. There is also a shortage of workers at ports, which is causing congestion and holding up the delivery of raw materials.

Motor vehicle assembly dropped to an annualized rate of 7.78 million units, the lowest since April 2020, from a pace of 8.82 million units in August.

"Supply issues limiting production will likely continue to limit consumption of autos, with latest industry guidance suggesting shortages could last well into 2022," said Veronica Clark, an economist at Citigroup in New York.

Excluding autos, manufacturing output dropped 0.3 percent. The Fed said Hurricane Ida, which devastated U.S. offshore energy production in late August, contributed 0.3 percentage points to the drop in manufacturing output.

With auto and consumer energy products output tumbling, consumer goods production fell 1.9 percent last month. There were, however, increases in the production of primary metals and electrical equipment, appliances and components, as well as furniture and related products.

Nondurable goods output dropped 1.0 percent, with large decreases in chemicals, petroleum and coal products.

Overall, manufacturing output increased at a 5.3 percent rate in the third quarter after growing at a 5-percent pace in the second quarter. Motor vehicle and parts production rebounded at an 8.6-percent rate as manufacturers scrapped annual plant closures for retooling over summer to manage their chip supply. Motor vehicle output plunged at a 24.6-percent pace in the second quarter.

Stocks on Wall Street were lower. The dollar was steady against a basket of currencies. U.S. Treasury prices fell.