US industrial production fell for the second month in a row in October, hurt by hurricanes and the strike by Boeing factory workers, but is expected to recover in November as the impact of these factors eases.
Industrial production fell 0.3% last month, following a downwardly revised decline of 0.5% in September, the Federal Reserve said Friday. Economists polled by Reuters had forecast industrial production would fall 0.3%, after a previously reported 0.3% drop in September.
The Fed estimated that the strike depressed industrial production by 0.2 percentage points in October, after a 0.3 percentage point hit in September. Hurricane Milton and the lingering effects of Hurricane Helene subtracted 0.1 percentage point from production.
The strikers returned to work last week after accepting a new contract, and the disruptions caused by the hurricanes have largely disappeared.
Industrial production fell 0.3% year-on-year in October.
Factory output decreased 0.5% last month from the previous month, after falling 0.3% in September, and was down 0.3% on an annual basis. The industrial sector, which accounts for 10.3% of the economy, has struggled amid higher interest rates. It is likely that it will remain on hold for some time yet, even with the US central bank having started its easing cycle.
Production of motor vehicles and parts fell 3.1% last month, while aerospace production fell 5.8%. This resulted in a 1.2% drop in durable goods production.
Production of non-durable manufacturing rose 0.1%, as gains in chemical, paper, petroleum and coal production offset declines in output from textile mills, as well as apparel and leather, printing and media, and plastic and rubber products. .
Mining production rose 0.3% last month, after falling 1.9% in September. Production in the public services sector increased by 0.7%, after registering a 0.3% increase in the previous month.
The industrial sector’s production capacity utilization, a measure of how fully companies are using their resources, fell from 77.4% in September to 77.1%. It is 2.6 percentage points below its 1972-2023 average.
