From Bloomberg news wire
U.S. industrial production rose 0.9% in October, the most in 17 months, according to the Federal Reserve. The rise in output at factories, mines and utilities followed a 1.5 percent decline in September. Economists said that lean inventories and business spending on new equipment will fuel manufacturing and contribute more to economic growth.
Although slowing auto sales limited additional manufacturing production (U.S. sales of cars and light trucks in October fell to 14.7 million on an annualized basis, the lowest for any month since 1998), production of business equipment, such as computers and telecommunications gear, rose 6.6% in October after falling 4.6% a month earlier.
Production at the nation's factories rose 1.4 percent in October, the most in six years, according to today's Fed report. Recovery from the Gulf Coast hurricanes and the end of a strike at Chicago-based Boeing Co., the world's largest maker of aircraft, helped manufacturing. Mining and utility output both declined in October
Because home construction slowed 5.6%, the slowest since March, some analysts believe that strength in manufacturing will pick up some of the slack as the housing boom begins to fade. Economists forecast a 1% rise in industrial production, according to the median of 61 estimates in a Bloomberg News survey.
Jobless claims declined 25,000 last week to a seven-month low of 328,000 last week, suggesting an improving labor market. Filings were the lowest since the week ended April 16.
Federal Reserve policy makers raised the overnight lending rate a 12th straight time on Nov. 1 to keep inflation from spreading due in part to the increase in industrial capacity to 79.5% from 78.9% a month earlier.
