The Federal Reserve said that manufacturing production expanded robustly in October, up 1.3 percent, its fastest monthly pace of growth since April. Output, especially for nondurable goods, jumped significantly in October, bouncing back slowdowns related to recent hurricanes.
In October, durable and nondurable goods production rose by 0.4 percent and 2.3 percent, respectively, with the latter rebounding from significant declines in activity in August and September in the chemicals and petroleum and coal products segments due to Hurricanes Harvey and Irma.
These data have seesawed from month to month since the spring, but production in the manufacturing sector as a whole has now expanded for two straight months.
As a result, manufacturing production has risen by 2.5 percent over the past 12 months, the best year-over-year rate since August 2014. In a similar manner, manufacturing capacity utilized soared from 75.5 percent in September to 76.4 percent in October, a reading not seen since May 2008.
The underlying data in October were mostly higher. The largest gains in the manufacturing sector were seen in the chemicals (up 5.8 percent), petroleum and coal products (up 4.0 percent), textile and product mills (up 1.6 percent), apparel and leather (up 1.3 percent) and motor vehicles and parts (up 1.0 percent), among others. In contrast, output was lower for plastics and rubber products (down 0.9 percent), nonmetallic mineral products (down 0.3 percent), food, beverage and tobacco products (down 0.2 percent), and miscellaneous durable goods (down 0.1 percent).
Meanwhile, total industrial production increased by 0.9 percent in October, extending the 0.4 percent gain seen in September. In addition to manufacturing, utilities output also rose strongly, up 2.0 percent for the month. On the other hand, mining production was off by 1.3 percent, falling because “Hurricane Nate caused a sharp but short-lived decline in oil and gas drilling and extraction” for the month, according to the press release.
Over the past 12 months, industrial production has risen 2.9 percent, the best year-over-year pace since January 2015. Mining and utilities output increased 6.4 percent and 0.9 percent year-over-year, respectively, in the latest data. In addition, capacity utilization rose from 76.4 percent to 77.0 percent, a 2½-year high.