US industrial production down in October as auto strikes limit output

(Sharecast News) - Industrial production in the US declined more than expected in October, according to data out Thursday from the Federal Reserve, as auto factory strikes weighed on output. Output contracted by 0.6% after a revised 0.1% increase in September; the initial estimate for the previous month was a gain of 0.3%.

October's drop was worse than the 0.3% decline expected by analysts.

Manufacturing output during the month was down 0.7% as a result of a 10% drop in the production of motor vehicles and parts, following the United Auto Workers (UAW) strikes at factories of General Motors, Ford and Chrysler owner Stellantis. The strikes started mid-September and continued until the end of October.

Excluding motor vehicles and parts from the results, manufacturing output would have risen by 0.1%.

Commenting on the data, economist Kieran Clancy from Pantheon Macroeconomics said the end of the UAW strikes means manufacturing output will "likely mean-revert in November".

"That said, the underlying trend is still more or less flat, and is unlikely to improve substantially in the near-term. Capital spending intentions are no longer falling sharply but remain depressed, and the external boost to activity implied by China's manufacturing PMIs looks limited."