Industrial production in U.S. rises in sign of stabilization

Industrial production in the U.S. rose more than forecast in September, partially reversing the prior month’s slump, indicating manufacturers are regaining their footing.

Output at factories, mines and utilities rose 0.4 percent after a 1.4 percent decline in August that was the biggest since March 2009, the Federal Reserve reported today in Washington. The median estimate in a Bloomberg survey of 85 economists called for production to rise 0.2 percent. Manufacturing, which makes up 75 percent of the total, climbed 0.2 percent.

The biggest two-month gain in retail sales in almost two years may mean demand from American consumers is making up for slowing sales overseas and declining business investment as the so-called fiscal cliff approaches. A pickup in manufacturing would help give the world’s largest economy a lift.

“The sector is now stabilizing,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “We’re now in a situation where it’s getting less bad. We’re growing, but we’re not quite there yet. It’s going to be treading water through the end of the year.”

Estimates in the Bloomberg survey ranged from a drop of 1 percent to an increase of 0.7 percent. The prior month was previously reported as a decline of 1.2 percent. Manufacturing accounts for about 12 percent of the economy.

Capacity utilization, which measures the extent to which plants are achieving their full potential output, rose to 78.3 percent from 78 percent.

Consumer Prices

The cost of living in the U.S. rose in September for a second month, reflecting a jump in energy expenses that failed to trickle through to other goods and services, a report today from the Labor Department also showed.

The consumer-price index increased 0.6 percent for a second month. Economists surveyed by Bloomberg had forecast a 0.5 percent advance. The so-called core measure, which excludes more volatile food and energy costs, climbed 0.1 percent, less than projected.

Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.5 percent to 1,442.9 at 9:17 a.m. in New York as companies from Johnson & Johnson to UnitedHealth Group Inc. raised their 2012 profit forecasts.

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