Industrial Output Disappoints

WASHINGTON (TheStreet) -- Industrial production inched higher in October by 0.1%, a slower growth rate than the average 0.9% uptick registered over the previous three months and below economists' expectations for the period.

Manufacturing and mining output declined by 0.1% and 0.2%, respectively, offset by utilities, which saw a 1.6% increase, the Federal Reserve said in its monthly report Tuesday.

Analysts were looking for an increase in total industrial production of 0.4% according to a Bloomberg survey.

With the expiration of the cash-for-clunkers trade-in program, declines in automobile output, which fell 2% in October, were largely responsible for the manufacturing weakness. The annual rate for the assembly of light motor vehicles dropped to 6.8 million units in October from 7.1 million the previous month. The federal trade-in program had boosted the annual rate dramatically from 4.1 million units as of June.

Business equipment, especially computing gear, also saw weakness, dropping 0.2% from the previous month.

As for the percentage of U.S. factory floors currently idled versus those churning out products, the Fed said overall capacity utilization in October amounted to 70.7%, up 0.2%. Still, that's a steep 10.2% below the average rate from 1972 to 2008.

Compared with October 2008, total industrial production was off by 7.1%.