Autos and chemicals boost US industrial production in October
US manufacturing roared back into life in October, amply offsetting a large drop in mining output.
Total industrial production rose by 0.9% month-on-month, according to the Federal Reserve, more than doubling economists' forecasts for an increase of four tenths of a percentage point.
Factory output was especially strong, jumping 1.3% on the month, with that of mining shrinking 1.3% while electricity production powered ahead by 2.0% albeit on the back of two very weak months.
Auto and parts clocked in with the largest increase over the month, of 1.0%, of all the durable goods industry groups.
In comparison to a year ago, total industrial production was 2.9% higher.
Factory operating rates still below long-term average
October's increased levels of activity pushed the rate of operating capacity usage up by 1.2 percentage points to 77.0% (consensus: 76.2%).
Within manufacturing, the factory operating rate increased by 0.7 percentage points on the month to 76.4% - which was two points below its long-run average - while in mining it jumped by 2.5 percentage points to 82.4%.
Compared to September, and by market groups, production of final products grew by 0.7% (consumer goods: 0.9%; business equipment: 0.5%), that of non-industrial supplies by 0.5% (construction: 0.4%) and that materials by 1.3%.
Production of business equipment increased across all the major categories, the Federal Reserve said.
The Fed also noted the 12.3% increase in output of chemicals materials as factories reopened and returned to normality after being shuttered by hurricane Harvey.
In a reaction note penned to clients, Paul Ashworth, chief US economist at Capital Economics said: "As a gauge of how well the industrial sector is doing, capacity utilisation rebounded to a two-and-a-half-year high of 77.0% last month, from 76.4%. With the industrial survey evidence still unusually strong, decent gains can be expected to continue for at least the next six months."