U.S. Industrial Production Declines in October
by:Tom Moeller
|in:Economy in Brief
Summary
- Factory output decline led by sharp drop in autos.
- Other industry performance is mixed.
- Capacity utilization falls to four-month low.
Total industrial production fell 0.6% (-0.7% y/y) in October after a 0.1% September uptick, revised from 0.3%, and stability during August, according to the Federal Reserve Board. The October decline compared to expectations for a 0.4% fall in the Action Economics Forecast Survey.
By industry groups, manufacturing production fell 0.7% m/m and 1.7% y/y, after a 0.2% September gain. Durable goods production fell 1.3% (-1.6% y/y) following a 0.1% uptick. Motor vehicle & parts production declined 10.0% (-6.6% y/y) and primary metals weakened 1.7% (-0.8% y/y). Machinery output fell 0.7% (-5.0% y/y) furniture production dropped 1.4% (-10.6% y/y). Working higher, production of electrical equipment, appliances & components strengthened 1.5% (-1.0% y/y) and computer & electronics output rose 1.9% (5.5% y/y). Aerospace & miscellaneous transportation production increased 1.0% (4.5% y/y).
Nondurable goods production eased 0.1% (-1.8% y/y) in October after a 0.2% September rise. Plastics & rubber products fell 2.2% (-7.0% y/y) but petroleum & coal output rose 2.2% (1.4% y/y). Textiles & product mills production improved 0.1% (-1.1% y/y) while apparel production gained 0.4% (-7.5% y/y). Chemical output fell 0.6% (+1.3% y/y) and food, beverages & tobacco production gained 0.2% (-3.6% y/y).
Mining activity grew 0.4% (2.2% y/y) in October following no change in September while electric & gas utilities output fell 1.6% (+2.9% y/y) after declining 0.6% in September.
By market groups, consumer goods output fell 1.2% (-2.0% y/y) in October after a 0.1% slip in September, reflecting a 5.8% drop (-5.9% y/y) in durable consumer goods and little change (-0.9% y/y) in nondurable consumer goods. Business equipment output fell 0.5% (-3.0% y/y) after declining 0.9% in September. Construction supplies production increased 0.2% (-1.9% y/y) while materials production fell 0.6% (+0.6% y/y).
In special classifications, factory output of selected high-tech industries strengthened 1.4% (14.4% y/y) in October, the same as in September. It was the ninth straight m/m gain. Manufacturing production excluding selected high-tech industries fell 0.7% (-2.1% y/y). Manufacturing production excluding both selected high-tech and motor vehicles & parts was unchanged (-1.8% y/y).
Capacity utilization fell to 78.9% in October from its high of 80.8% in September of last year. A rate of 79.4% had been expected. Manufacturing capacity utilization eased to 77.2% in October from 77.8% in September.
Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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