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

Consumer Goods

The Fed report showed the output of consumer goods was little changed last month as a slowdown in auto assemblies was offset by pickups in the manufacturing of appliances and clothing.

Retail sales climbed 1.1 percent in September following a 1.2 percent increase the prior month, the best back-to-back showing since late 2010, Commerce Department figures showed yesterday.

Production of motor vehicles and parts decreased 2.5 percent after a 5.1 percent drop a month earlier. The decrease is at odds with improving sales and may indicate automakers are trying to trim inventories. Cars and light trucks sold at a 14.9 million annual pace in September, the most since March 2008, according to Ward’s Automotive Group. Chrysler Group LLC and General Motors Co. reported gains.

“We continue to be encouraged by positive signs from the housing sector, lower jobless claims, higher consumer sentiment and higher consumer spending,” Kurt McNeil, GM’s vice president of U.S. sales, said on an Oct. 2 conference call. “The stiffest headwinds are uncertainty, some of which is related to the sovereign debt crisis in Europe and concerns about the pace of growth here at home.”

Excluding Autos

Excluding autos and parts, manufacturing production climbed 0.4 percent after decreasing 0.6 percent in August.

Mining production, which includes oil drilling, increased 0.9 percent in September after falling 1.6 percent the prior month.

Companies that provide equipment for natural gas shale drilling have been hurt by cooling global demand for energy, with the number of operating on-shore rigs falling last month to the lowest in a year.

Houston-based Schlumberger Ltd., the third-largest fracking-service provider in the U.S., is mothballing pressure- pumping equipment. At Chesapeake Energy Corp. in Oklahoma City, Oklahoma, the number of gas rigs are down by 90 percent, Senior Vice President Jeff Mobley said at an Oct. 11 conference.

Utility output advanced 1.5 percent after a 4.3 percent drop in August.

Today’s Fed report also showed output of business equipment rebounded 0.8 percent last month after falling 0.9 percent in August. Machinery output climbed 0.4 percent after falling 0.6 percent, and construction supplies gained 1.3 percent.

Bloomberg News

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