Markets

United States industrial output rises as hurricane hit reverses

United States industrial output rises as hurricane hit reverses

After hurricanes battered the southern and eastern U.S, overall industrial production grew 0.4% in September from the prior month and declined 0.5% in August. Hurricane-related catch-up drove most of the growth, with newly-minted cars and vehicle parts playing a big part output.

Industrial production rose 0.9 percent in October, and manufacturing increased 1.3 percent.

The manufacturing sector, which makes up about 12 percent of the nation's economy, rose 1.3 percent last month after an upwardly revised 0.4 percent increase in September.

The Institute for Supply Management, a trade group of purchasing managers, said recently that its manufacturing index dipped to 58.7 in October from a 13-year high 60.8 in September.

The report also showed that the, a measure of how fully firms are using their resources, settled at 77.0% in October, better than the forecast for a reading of 76.3% and compared to 76.4% (revised from 76.0%) a month earlier. The storms caused refineries and plants on the Gulf Coast to shut down and stalled other key parts of the manufacturing process.




"The pick-up in global growth and the weaker dollar have triggered a broader turnaround in the prospects for the manufacturing sector", said Paul Ashworth, chief US economist at Capital Economics.

Factory output was especially strong, jumping 1.3% on the month, with that of mining shrinking 1.3% while electricity production powered ahead by 2.0% albeit on the back of two very weak months.

Over the past year, manufacturers have added 156,000 jobs. Production of durable and nondurable goods increased 0.4% and 2.3%, respectively.

In a reaction note penned to clients, Paul Ashworth, chief United States economist at Capital Economics said: "As a gauge of how well the industrial sector is doing, capacity utilisation rebounded to a two-and-a-half-year high of 77.0% last month, from 76.4%". The Fed said this effect will be "short-lived".

Production of business equipment increased across all the major categories, the Federal Reserve said.