U.S. industrial output accelerated in October, because manufacturing production bounced back after hurricane-related disruptions.
Industrial production, a measure of factory, mining and utility output, rose to a seasonally adjusted 0.9% in October from the prior month, the Federal Reserve said Thursday.
Economists surveyed by The Wall Street Journal had expected a 0.6% gain for September.
From a year earlier, industrial production rose 2.9% in October.
Industrial production grew 0.4% in September from the prior month and declined 0.5% in August after hurricanes battered the southern and eastern U.S. This caused refineries and plants on the Gulf Coast to shut down and stalled other key parts of the manufacturing process. The Fed said hurricanes knocked out a significant slice of production in both months.
Now, producers are playing catch-up, which contributed about two thirds of the overall industrial production increase in October, Fed data showed.
At the industry level, output at U.S. factories clocked a one-month increase in October, rising 1.3%, which is significantly above the combined manufacturing increases in each of the five prior months. Hurricane-related catch-up caused almost all of the October jump in factory production.
October’s gain in manufacturing is a boon to the industry, which was already picking up steam this year because of a weaker dollar, more stable oil prices and global economic growth. The Institute for Supply Management’s closely watched index of manufacturing hit a more than six-year record in mid-2017.
Capacity utilization, which reflects how much industries are producing compared to what they could potentially produce, rose by 0.6 percentage point to 77% in October, which is 2.9 percentage points below the long-run average. Economists had expected 76.4% last month.
Mining output decreased 1.3% in October from a month earlier because a storm affecting the Gulf of Mexico that impacted oil and gas drilling and extraction. The Fed said this effect will be “short-lived.” Utility production increased 2%.
Source: Dow Jones