U.S. industrial production decreased in October following a similar decline in September.

The Federal Reserve’s latest Industrial Production and Capacity Utilization report showed that production decreased 0.3% in October month-to-month, exceeding the market expectation of a 0.2% decreased by economists surveyed by the Wall Street Journal.

The fed cited the machinists’ strike at Boeing hindering total IP growth by 0.2 percentage points in October (0.3 in September), while Hurricane Milton and the lingering effects of Hurricane Helene together curtailed growth by an estimated 0.1 points.

At 102.3% of its 2017 average, total industrial production in October decreased by 0.3% year-over-year. Capacity utilization moved down to 77.1%, which is down 2.6-percentage-points from its long run (1972-2023) average.

Total October production was impacted by a decrease of 0.5% in manufacturing, offset by an increase in mining of 0.3% and utilities by 0.7%.

source: tradingeconomics.com

Market Groups

Major market groups saw mixed results in October. The index for consumer goods was flat compared to September, while production of durables decreased 1.4% and the index for nondurables increased 0.4%.

Business equipment showed a negative decline with a 2.7% decrease in October. While transit equipment led the decline in October due to the work stoppage in civilian aircraft.

Industry Groups

Manufacturing output decreased 0.5% in October month-to-month and was 0.3% below its year-earlier-level. Nondurable manufacturing saw a slight increase from gains in chemical, paper and petroleum and coal products offset declines in textile mills.

Specific industrial such as aerospace and miscellaneous transportation equipment (-5.8%) saw drastic decreases in the month of October, in part due to the Boeing strikes.

Mining output increased 0.3% in October month-to-month, and utilities increased 0.7%, as an increase in electric utilities was partially offset by a decrease in natural gas utilities.

Capacity utilization for manufacturing decreased by 0.5-percentage-points in October to 76.2%.