US Industrial Production: Underlying trend in manufacturing to remain subdued over the next months –  Wells Fargo

Industrial production declined by 0.3% during October. While the strike at General Motors and utilities accounted for most of the pullback, mining continues to retrench and the underlying trend in manufacturing output remains subdued, explained analysts at Wells Fargo.  

Key Quotes:  

“Industrial production fell 0.8% was the steepest one-month drop in more than 10 years. All major segments of the industrial sector got in on the action, with utilities, mining and manufacturing production declining last month. After an unusually hot September, the return to more normal temperatures led to utilities output, which accounts for about 10% of industrial production, falling 2.6% in October.”

“We saw the effect of the GM strike in September, but it more clearly reared its head in the October manufacturing figures. Total factory output, which comprises about three quarters of industrial production, fell 0.6%, as the GM stoppage lasted almost the entirety of October.”

“In a separate report earlier this morning, the Empire State Manufacturing Survey showed factory activity in New York State has been little changed. The New York Fed’s gauge of manufacturing activity, the first of the November purchasing managers’ indices, shed 1.1 point to land at 2.9. That kept the index in its fairly tight range since July of 2-5, hinting that while factory activity remains tepid, conditions are not worsening materially.”