Washington, DC, November 16, 2006--Output at the nation's factories, mines and utilities rebounded in October, after hitting a soft patch in September, but the weak auto sector damped gains, the Federal Reserve reported Thursday.
Industrial production rose 0.2% in October after production dropped 0.6% in September. The decline in September was the biggest since the previous September, when Hurricane Katrina disrupted the economy.
Capacity utilization rose to 82.2% in October from a revised 82.1% in the previous month.
The gains in production and capacity use were roughly in line with estimates. Economists were expecting production to rise 0.3% and capacity utilization to rise to 82.0% from the initial estimate of 81.9%.
The picture for the industrial sector in the third quarter was a little brighter as the Fed revised August industrial output to show an increase of 0.3%, up from previous estimates of a flat month.
Manufacturing output fell 0.2% in October, due to the weak automobile sector. Output of motor vehicles fell 3.9 in October, after a 1.9% fall in the previous month. Excluding motor vehicles, manufacturing output rose 0.1% in the month. Total industrial output would have risen 0.5%.
The decline in auto production in October was due to another drop in the output of light trucks, which have fallen out of favor after the spike in gasoline prices over the past year. A strike at a major tire producer also weighed on the index, the Fed said.
Output of utilities jumped 4.1% in October after falling 4.6% in the previous month. Mining output rose 0.6%.
Output of high-technology goods increased 2.3% in October after rising 2.7% in the previous month. Semiconductor production rose 2.5%, while computer equipment output rose 1.2%.
Production of consumer goods fell 0.5%, as durable goods decreased 2.6%, primarily reflecting the decline in auto production.
Production of business equipment increased 0.7% in October.
Production of non-industrial supplies increased 0.8% in October. Production of materials increased 0.4%.
