Industrial production crawls up in October
Increase of 0.1% is less than expected
Tom Stundza -- Purchasing, 11/18/2009 3:02:53 PM
Industrial production edged up 0.1% in October, the Federal Reserve has reported. Since economists had expected production to increase by 0.4%, the lower rate of growth is a signal that consumers and businesses remain cautious in their spending, analysts say.
With the impact of the cash-for-clunkers program fading, automotive assembly slipped 1.7% last month, which helped drag down total factory output, the biggest portion of industrial production.. It was the poorest showing since output fell 0.4% in June. Since then, industrial output had posted strong gains, helped by a rebound in auto production to replace the old vehicles turned in for government rebates.
An Associated Press report says industrial production should post small gains in coming months, consistent with the view of economists that the economy has begun to recover from the worst recession since the 1930s. But economists caution that the rebound in manufacturing, just as in other sectors of the economy, will be slow and halting.
Analysts say overall industrial production would have fallen except for a 1.6% surge at utilities, which reflected an unusually cold October that boosted electricity production. Output in the mining sector, which covers oil and gas drilling, dipped 0.2%.
RTT News adds that the Fed report shows that production cutbacks last month affected not only autos, but also appliances, furniture and carpeting, clothing, computer and electronic products, paper products, petroleum and coal products, fabricated metal products and other consumer durables.
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