FILE PHOTO – Assembly workers work on the underside of 2015 Ford Mustang vehicles on the production line at the Ford Motor Flat Rock Assembly Plant in Flat Rock, Michigan, August 20, 2015. REUTERS/Rebecca Cook
November 15, 2019
WASHINGTON (Reuters) – U.S. industrial production fell faster than expected in October as output for the manufacturing, mining and utilities sectors all fell.
The Federal Reserve said on Friday industrial production declined 0.8% last month after an upwardly revised 0.3% decline in September. It was the largest decline since May of 2018.
Economists polled by Reuters had forecast industrial production falling 0.4% last month after a previously reported 0.4% percent drop in September.
Manufacturing output fell 0.6% last month, driven by an 11.1% drop in motor vehicle production. U.S. producers assembled cars and trucks in October at an annual rate of 9.14 million units, down 2.5 million since a recent peak in July.
The strike at General Motors added to that decline, contributing to a 1.2% drop in durable goods output, the Fed reported.
But excluding motor vehicles and parts, U.S. manufacturing production still fell 0.5%, the Fed said, and durable goods still dropped 0.2%.
Production rose 0.1% for computers and related products, but output for communications equipment fell 0.4%.
The data point to the possible fallout of the U.S. trade war with China, with final production of business equipment falling 0.6% amid weak business investment.
The Trump administration raised tariffs on a range of Chinese imports in July, triggering retaliatory tariffs from Beijing on U.S. exports.
Mining production fell 0.7% in October. Utilities fell 2.6% percent.
With overall industrial production falling, capacity utilization, a measure of how fully firms are using their resources, fell last month to 76.7% from 77.5%. That was the lowest level since September 2017.
Officials at the Fed tend to look at capacity use measures for signals of whether resources may become scarce and cause inflation to rise.
(Editing by Chris Reese)