Factory production struggled to gain traction in October car makers cut back for a third consecutive month, showing US manufacturing was off to a slow start in the fourth quarter.
The 0.2 per cent increase in output matched September's advance after it was revised down, figures from the Federal Reserve in Washington show.
Total industrial production unexpectedly dropped 0.1 per cent, reflecting the vehicle pullback and less demand at utilities and mining companies.
A broadening in consumer spending beyond motor vehicles, where a recent dip left sales near the strongest levels in eight years, will be needed to give manufacturing an additional boost as growth slows overseas.
American plants pumped out more machinery and electronics last month, a sign business investment is bolstering the economic expansion. The outlook “remains quite favourable,” said Millan Mulraine, deputy head of US research and strategy at TD Securities USA in New York, who correctly forecast total output would drop.
“If we do have consumers beginning to spend again and businesses starting to invest in a more meaningful manner, we should see that reflected in the industrial sector.”
US stocks fluctuated, after the Standard and Poor’s 500 Index climbed to a record last week, as corporate deals helped offset the industrial production data and a report showing Japan fell into a recession last quarter.
- Bloomberg
