WASHINGTON (11/18/13)--A key measure of economic activity fell slightly in October, according to the Federal Reserve.
U.S. industrial production fell by 0.1% last month, officials from the central bank said on Friday.
The drop defied some experts' expectations. Economists polled by Reuters had expected industrial production to grow by 0.2% (Reuters Nov. 15)
Fed officials pointed to declines in output at power plants and mines as the driving factor behind the dip, with Tropical Storm Karen forcing temporary shutdowns of offshore oil and gas extraction in the Gulf of Mexico. Output by mines and utilities fell by 1.1% and 1.6%.
The news was slightly better in the manufacturing sector, which saw output rise by 0.3% in October after a 0.1% increase in September. Gains were made despite the automobile industry decreasing its output for the first time since July (Economy.com Nov. 15). The latest data release also showed that manufacturing production was up by 4.4% at an annualized rate over the three months leading up to October.
The entire data set is used by Fed officials to set monetary policy, with higher output and capacity utilization indicative of inflationary pressure.
Industrial capacity utilization--a measure of firms' full employment of resources--dropped in October by 0.2% to 78.1%. Reuters said that the measure is 2.1% below its long-run average. Manufacturing capacity utilization increased by 0.1% to 76.2%.