US Industrial Production Unexpectedly Dips 0.2% In October

Industrial production – a broad measure of everything made by American factories, mines and utilities – fell a seasonally adjusted 0.2 per cent in October from a month earlier, the Federal Reserve said on Tuesday.

The Fed also said capacity utilization for the industrial sector slipped to 77.5 percent in October from 77.7 percent in September. Slower growth in China, Europe and other large economies has also weighed on USA exports. The drop surprised economists, who had expected production to inch up by 0.1%.

Capacity utilization in the manufacturing sector dipped to 80.8% and capacity utilization in the mining sector edged down to 76.1%, while capacity utilization in the utilities sector inched up to 76.7%. Factory capacity picked up to 76.4 percent.

The drop in output reflected a 1.5 percent decrease in the mining index. That would be the first increase after two months of declines. Cars and light trucks sold at an 18.1 million annualized rate last month, the most since July 2005, according to data from Ward’s Automotive Group.

Economists surveyed by The Wall Street Journal had anticipated industrial production to be flat in October, and capacity utilization of 77.5 per cent. Production fell 0.2 percent in September and 0.1 percent in August. Almost all categories of durable-goods production increased, including wood products, appliances, and primary metals.

Business equipment production rose 0.2 percent in October after a 0.5 percent decrease the month before.