The 2020 Mid-Year Economic Update_long

Industrial Production Down 0.2% in October

Manufacturing output increased 0.4 percent for the month.

Industrial production decreased 0.2 percent in October after decreasing the same amount in September, according to the Federal Reserve. Manufacturing output moved up 0.4 percent, while the index for mining fell 1.5 percent and the index for utilities dropped 2.5 percent.

For the third quarter as a whole, total industrial production rose at an annual rate of 2.6 percent.

At 107.2 percent of its 2012 average, total industrial production in October was 0.3 percent above its year-earlier level. Capacity utilization for the industrial sector declined 0.2 percentage point in October to 77.5 percent, a rate that is 2.6 percentage points below its long-run (1972–2014) average.

Consumer goods production decreased 0.1 percent in October. The index for consumer durables rose 0.5 percent, while the index for consumer nondurables moved down 0.3 percent. Within consumer nondurables, a large drop in energy products outweighed a small gain in non-energy products.

The output of business equipment rose slightly; decreases for transit equipment and for information processing equipment were more than offset by an increase for industrial and other equipment. The index for construction supplies rose 1.7 percent, while the index for business supplies edged down. The production of materials declined 0.4 percent. The output of energy materials fell 2 percent, while the indexes for both durable and nondurable materials, as well as for all of their major components, rose.

Manufacturing output increased 0.4 percent in October, as the output of durable goods advanced 0.5 percent and the production of nondurable goods rose 0.3 percent. 

"The headwinds in manufacturing – rising trade deficits, a decline in the supply chain of oil country goods and high inventories – are at their worst, so the good news that manufacturing did post solid growth in October bodes well for going into 2016," said Daniel Meckstroth, chief economist for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation.

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