Up 4.1% from last year's level, manufacturing output increased 0.5% in October, the Federal Reserve announced on Nov. 16. The factory operating rate moved up to 75.4%, a rate 11.0 percentage points above its trough in June 2009 but still 3.6 percentage points below its long-run average.
Industrial production expanded 0.7% in October after having declined 0.1%in September. Total industrial production for October was 3.9% above its year-earlier level.
The output of durable goods increased 0.8% in October and has gained 7.8%in the past 12 months. Advances of at least 2% were reported in October for electrical equipment, appliances, and components; motor vehicles and parts; and aerospace and miscellaneous transportation equipment. In contrast, losses of 2 percent or more occurred for wood products and nonmetallic mineral products.
The index for nondurable manufacturing rose 0.2% in October. Among the major components of nondurables, the output of apparel and leather jumped 2.8%, and gains were also registered for food, beverage, and tobacco products; chemicals; and plastics and rubber products. Decreases were recorded for textile and product mills, paper, printing, and petroleum and coal products. The index for other manufacturing (non-NAICS), which consists of publishing and logging, declined 0.2%.
"Motor vehicles posted a very strong 3.1% production gain last month as pent-up consumer demand for vehicles drove up domestic production," said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI." Aerospace and electrical equipment industries were also large contributors to the manufacturing industry's production growth in October.
"The good news is that U.S. aerospace firms and other industries are benefiting from the strong growth in emerging economies, and domestic businesses are confident enough in the future to continue expanding purchases of capital equipment," he added. "A worrisome aspect in the industrial production report is that industries tied to the housing market are still struggling. The unwinding of the negative effects of the housing debacle is, unfortunately, taking a long time and continues to have a limiting effect on the manufacturing recovery."
