US industrial output falls on utilities, mining
But third month of gains in manufacturing suggests economy remains on growth path
Manufacturing output increased 0.3 per cent in October.
US industrial production unexpectedly fell in October as output at power plants and mines declined, but a third straight month of gains in manufacturing suggested the economy remained on a moderate growth path.
Industrial output slipped 0.1 per cent last month after advancing 0.7 per cent in September, the Federal Reserve said today. The drop in October was the first since July.
Economists polled by Reuters had expected industrial production to gain 0.2 per cent.
Manufacturing output increased 0.3 per cent even as automobile assembly fell for the first time since July.
Manufacturing output, which had edged up 0.1 per cent in September, was supported by gains in the production of primary metals, furniture and computer and electronic products among others.
The sector is regaining some momentum after hitting a soft patch early in the year.
Utilities output fell 1.1 per cent last month after surging 4.5 per cent in September. Mining production contracted 1.6 per cent in October, the first drop in seven months.
The Fed attributed the fall to temporary shutdowns of oil and gas rigs in the Gulf of Mexico as Tropical Storm Karen approached.
Last month, the amount of industrial capacity in use fell 0.2 percentage point to 78.1 per cent.
Industrial capacity utilisation - a measure of how fully firms are using their resources - was 2.1 percentage points below its long-run average.
Officials at the Fed tend to look at utilisation measures as a signal of how much “slack” remains in the economy, and how much room growth has to run before it becomes inflationary. (Reuters)