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.