US in­dus­trial out­put drops

The Pak Banker - - Front Page -


In­dus­trial pro­duc­tion in the US un­ex­pect­edly de­clined in Oc­to­ber as su­per­storm Sandy knocked out power in the North­east.

Out­put at fac­to­ries, mines and util­i­ties dropped 0.4 per cent last month af­ter a re­vised 0.2 per cent in­crease in Septem­ber that was smaller than pre­vi­ously es­ti­mated, Fed­eral Re­serve data showed on Fri­day in Wash­ing­ton. Economists fore­cast a 0.2 per cent gain, ac­cord­ing to the Bloomberg sur­vey me­dian. The Fed said the storm cut to­tal pro­duc­tion by al­most one per­cent­age point.

Amer­i­can fac­to­ries, a source of strength for much of the three-year ex­pan­sion, face a per­sis­tent chal­lenge from Europe's re­ces­sion and slower growth in Asia. Fur­ther cut­backs in cap­i­tal spend­ing by com­pa­nies con­cerned about the pos­si­bil­ity of $607 bil­lion in au­to­matic tax in­creases and spend­ing re­duc­tions next year rep­re­sent an­other hur­dle for the in­dus­try. "Man­u­fac­tur­ing isn't the driver of the re­cov­ery that it was," John Ry­d­ing, chief econ­o­mist at RDQ Eco­nom­ics in New York, said be­fore the re­port. "Uncer­tain­ties over taxes hit­ting cap­i­tal spend­ing and prob­lems over­seas have hit the man­u­fac­tur­ing sec­tor."

Man­u­fac­tur­ing, which makes up 75 per cent of to­tal pro­duc­tion, slumped 0.9 per cent last month, match­ing Au­gust as the big­gest de­crease since May 2009. Fac­tory out­put ex­clud­ing the ef­fects of Sandy was about un­changed in Oc­to­ber from the prior month, the Fed said. Es­ti­mates of the 84 economists sur­veyed by Bloomberg for over­all pro­duc­tion ranged from a 0.3 per cent de­crease to a 0.6 per cent gain. Septem­ber's fig­ure was pre­vi­ously re­ported as a 0.4 per cent in­crease.

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