US industrial output falls on utilities and mining

Friday 15 November 2013 14.50
US industrial production slips by 0.1% in October
US industrial production slips by 0.1% in October

US industrial production unexpectedly fell in October as output at power plants and mines declined.

But a third month of gains in manufacturing in a row suggested the US economy remained on a moderate growth path.

Industrial output slipped 0.1% last month after advancing 0.7% 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%.

Manufacturing output increased 0.3%, despite automobile assembly falling for the first time since July.

Manufacturing output, which had edged up 0.1% 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% last month after surging 4.5% in September. Mining production contracted 1.6% 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%. 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.