Industrial Production Drops in October

Washington, DC, November 16, 2007--Industrial production unexpectedly dropped in October as slowing sales prompted factories to make fewer automobiles and appliances.

Production at manufacturers, mines and utilities fell 0.5%, the most since January, after a 02% gain in September, the Federal Reserve said in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 81.7 from 82.2.

Economists had been expecting a 0.1% gain in industrial production.

Factories, which account for about four-fifths of industrial production, made 0.4% fewer goods last month. Utility and mining output make up the rest.

Utility production dropped 1.6% after falling 0.1% in September, the Fed said.

Production of consumer durable goods, including automobiles, furniture and electronics, dropped 0.8% after falling 1.6% the prior month.

Motor vehicle and parts production fell 1% following a 3% drop, the report said. Manufacturing excluding autos declined 0.3%.

Production of high-tech equipment, such as computers and semiconductors, increased, suggesting corporate investment is still growing.