November 16, 2023 | 10:20
U.S. Industrial Production Driven Lower in October
U.S. industrial production fell 0.6% in October, marking the first decline in four months. Manufacturing output (the biggest share of industrial production) dropped 0.7% amid a 10% plunge in motor vehicles and parts. The autoworkers strike disrupted production in October, but with workers back on the line to start November, we're likely to see a rebound. Business equipment (-0.5%) and consumer goods (-1.2%) both fell for a second straight month.
Mining edged up 0.4% though the prior two months were revised to now show a decline. Meantime, volatile utilities fell 1.6%, marking a drop for the second month in a row. Capacity utilization dropped 0.6 ppts to 78.9%, the lowest this year.
Bottom Line: October’s industrial production fell more than expected amid a strike-related decline in autos. Looking ahead, factories are likely to struggle with recent Fed surveys underscoring weak momentum. Elevated borrowing costs are likely to undercut consumer demand and business investment, weighing on factory output.