IBJNews

U.S. factory production rises for 3rd straight month

Back to TopCommentsE-mailPrintBookmark and Share

U.S. factories increased production for a third straight month in October, as stronger output of primary metals and furniture offset declines in auto production.

Manufacturing output rose 0.3 percent last month, up from 0.1 percent in September, the Federal Reserve reported Friday. Factory output is the biggest component of industrial production, which also includes mining and utilities.

Overall industrial production fell 0.1 percent after a 0.7-percent September gain. The mining sector, which includes oil and gas drilling, declined 1.6 percent after six months of gains. Utility output fell 1.1 percent.

Manufacturing has been gaining strength in recent months. Output has risen in five of the past six months. And factories have stepped up hiring over the past three months, according to the government's October employment report released last week.

Factories are busier in part because overseas growth has picked up and the slow housing recovery has driven more demand for furniture and other wood products. Automakers are also having their best year for sales since the recession, although production of motor vehicles and parts fell 1.3 percent in October after two months of gains.

Output of primary metals such as steel rose 1.1 percent and furniture production was up 1.5 percent.

Economists were encouraged by the gains in manufacturing after a period of weakness in the spring and early summer. They predicted those increases would continue, helped by strengthening overseas demand and less impact from federal government spending cuts and tax increases.

"As long as the overseas recovery continues and the domestic fiscal drag fades, output should continue to grow at reasonable rates," said Paul Dales senior U.S. economist at Capital Economics.

The government report was the latest sign of strength for manufacturing. A private sector report from the Institute for Supply Management showed factory activity climbed to a 2-1/2-year high in October. The group's manufacturing index has risen for five straight months. The October gain was especially encouraging because it showed the federal government's 16-day partial shutdown had little effect on manufacturers.

The overall economy grew at an annual rate of 2.8 percent in the July-September quarter, according to initial figures that are subject o revision. But 0.8 percentage point of that growth came from a buildup in business stockpiles. Many economists believe businesses will cut back on stockpiling in the current October-December period and that will slow growth.

Manufacturers are hoping that rising export sales will offset weakness in domestic demand.

Through the first nine months this year, exports are up a modest 1 percent. U.S. companies have had to deal with weakness in Europe, which has cut into sales in that important market.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

ADVERTISEMENT