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US industrial output posts sharpest drop in 1.5 years

US industrial output posts sharpest drop in 1.5 years

Mubasher: US industrial production saw its biggest drop since more than one year and a half in October, due to a plunge in auto manufacturing output official data showed on Friday.

Industrial output, a gauge of factory, mining and utility output, fell by 0.8% last October, after a revised decline of 0.3% in September, according to the Federal Reserve Bank’s figures.

This marked the sharpest drop recorded since May 2018, according to MarketWatch.

Production at US factories, which makes up for 75% of the nation’s total industrial output, shrank by 0.6% during last month, compared with decline of 0.5% in the previous month.

The overall industrial production was impacted by the United Auto Workers strike at General Motors, which was not specified by the Fed’s data, leading auto output to drop by 7.1%.

Stripping out auto output, manufacturing production fell by a milder 0.1%.

Output of mining sector, comprising oil and gas drilling activities, also shrank by 0.7% during October, for the third decline in the past four months, while production at US utilities rose by 2.6%.

Capacity utilisation, which mirrors the hurdles to operating factories, mines and utilities in the US, declined month-on-month to 76.7% from 77.5%.

At 2:51 pm GMT, the EUR/USD pair rose by 0.21% to $1.1045.