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US industrial production falls most sharply in 17 months in October





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An employee of the Ford Motor Company is working on a new truck at a plant in Dearborn, Michigan.

The Figures: Industrial production in the US declined 0.8% in October, the largest decline since May 201

8, the Federal Reserve reported Friday. It was the third decline in production in the last four months. The decline was steeper than expected by Wall Street and declined 0.5%.

The report was influenced by the United Auto Workers strike at General Motors

GM, + 0.50%

which pushed automobile production by 7.1%.

However, the weakness was not limited to automobile production. Excluding cars, industrial production fell by 0.5%.

Production in the manufacturing sector fell by 0.6% in October. Production of ex-cars fell by 0.1% in October.

Industrial capacity fell to 76.7 in October. This is the lowest level in 25 months.

What happened: No sector saw any increase in production.

The growth-driven mining production declined 0.7% in October. This is the third decline in the last four months. Supply production fell 2.6% after a strong month-on-month increase.

US industrial production declined 1.1% yoy.

Overall picture: Manufacturing is hit hard by several headwinds, including weak global demand, uncertainty over international trade policy and the problems at Boeing Co. However, some economists have had a bottom in this report manufacturing industry disputes this impression.

US Federal Reserve Chairman Jerome Powell told lawmakers this week that his economists are watching closely to see if the weakness of the manufacturing industry is spreading to the consumer side of the economy. However, Friday's October retail sales data were generally positive.

Market Reaction: Stocks

DJIA, + 0.44%

should open higher on Friday as investors digested retail data.


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