U.S. industrial production falls by 17 months most in October
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Figures: US industrial production fell 0.8% in October, the largest decline since May 201[ads1]8, the Federal Reserve reported Friday. It was the third decline in production in the last four months. The fall was steeper than Wall Street's expected 0.5% decline.
The report was influenced by United Auto Workers' strike at General Motors
GM, + 0.56%
which reduced car production by 7.1%.
However, the weakness was not limited to car production. Excluding cars, industrial production fell by 0.5%.
Production production fell 0.6% in October. Car production in October was down by 0.1%.
Industrial capacity in use fell to 76.7 in October. It is the lowest level in 25 months.
What Happened: No sector showed a gain in production.
Mining production, which has been a driving force for growth, fell 0.7% in October. This is the third decline in the last four months. Utility production fell by 2.6% after a sharp increase last month.
On an annual basis, US industrial production has been reduced by 1.1%.
Big picture: The manufacturing sector is hit hard by several headwinds, including weak global demand, uncertainty surrounding international trade policy and the misery of Boeing Co. Some economists had discovered a trough in the industry, but this report believes that impression.
Fed Chairman Jerome Powell told lawmakers this week that his economists are watching closely to see if manufacturing sector weakness is spreading to the consumer side of the economy. But October retail data, released earlier Friday, was generally positive.
What do they say? "Evidence regarding the manufacturing sector tends to point to weakening conditions, with decent domestic demand offset by an ever-weaker export sector," said Josh Shapiro, chief economist of the US economist at MFR Inc. [19659004] Market reaction: Stocks opened higher on Friday as investors digested the retail data. Dow Jones industrial average
DJIA, + 0.53%
was up 117 points in mid-morning trading.
