Industrial Production +0.1% in October

This morning, the Federal Reserve reported that industrial production rose 0.1% for October. Wall Street had been expecting 0.2%. In the past year, IP is up 4.1%.

Manufacturing production, which accounts for three-quarters of the overall index, continued to grow at a solid pace for the fifth straight month, advancing 0.3% in October from the prior month. Meanwhile, output in the utilities and mining industries fell for the second month in a row in October, declining 0.5% and 0.3%, respectively.

Low unemployment and ramped up wage growth have helped spur consumer demand. At the same time, the late-2017 tax cuts helped stoke business investment, and the U.S. government has increased its defense spending. Rising crude prices in recent years helped the manufacturing industry too, though oil prices have declined in recent weeks.

Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, fell by 0.1 percentage point to 78.4% in October. Economists had expected 78.2%. Utilization has trended up in recent years, but remains 1.4 percentage points below its long-run average recorded from 1972 to 2017.

Posted by on November 16th, 2018 at 10:45 am


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