U.S. Industrial Production Unexpectedly Edges Down 0.1% In October
Reflecting a continued slump in utilities output, the Federal Reserve released a report on Wednesday unexpectedly showing a modest decrease in U.S. industrial production in the month of October.
The Fed said industrial production edged down by 0.1 percent in October following a revised 0.1 percent uptick in September.
The dip surprised economists, who had expected industrial production to inch up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.
The unexpected decrease in production came as utilities output tumbled by 1.5 percent in October after plunging by 1.7 percent in September.
Mining output also fell by 0.4 percent in October after climbing by 0.7 percent in September, while manufacturing output crept up by 0.1 percent after rising by 0.2 percent in the previous month.
“Utilities output may rebound in the months ahead, but we look for the industrial sector more broadly to suffer a downturn as the economy experiences a mild recession in the first half of 2023,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
She added, “Weakening demand, higher interest rates, and supply chain difficulties will continue to pose challenges for industrial activity in the months ahead.”
The report also showed capacity utilization in the industrial sector slipped to 79.9 percent in October from a downwardly revised 80.1 percent in September.
Economists had expected capacity utilization to inch up to 80.4 percent from the 80.3 percent originally reported for the previous month.
Capacity utilization in the manufacturing sector was unchanged at 79.5 percent, while capacity utilization in the mining and utilities sectors dipped to 88.4 percent and 72.1 percent, respectively.
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