US manufacturing output rose 0.5 per cent last month – the sector's biggest gain in three months.
According to the Federal Reserve overall industrial production was flat in October, but that neutral performance was heavily weighed down by a 3.4 per cent plunge in utilities production – something that occurs annually in early fall, as electric power demand declines after the summer cooling season ends. Also in October, mining production dipped 0.1 per cent.
Capacity utilization was unchanged at 74.8 per cent in October. The 74.8 per cent utilization rate is up 5.3 per cent from the previous year.
October's industrial production report represented a double win for the nation's manufacturing sector.
In addition to October's 0.5 per cent manufacturing sector surge, September's manufacturing output was revised to a 0.1 per cent increase, substantially better than the initially released estimate of a 0.2 per cent decline.
The US manufacturing sector's output continues to increase, propelled higher by slightly higher domestic demand and strong demand from international customers.
If the dollar remains near present levels, it will further help boost international demand for US industrial goods.
Under those conditions, the manufacturing sector is expected to be a major growth engine for US economic expansion until at least the first quarter of 2011.