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
said in its monthly report Tuesday.
Analysts were looking for an increase in total industrial production of 0.4% according to a
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%.
Meanwhile, the Labor Department said Tuesday that the producer price index, a measure of inflation at the wholesale level, rose 0.3% in October, less than the 0.5% increase that analysts were anticipating, according to Thomson Reuters. In September, the index showed a 0.6% decline.
Excluding prices for food and energy, both of which can fluctuate significantly month-to-month, prices fell by 0.6% in October, Labor said.
The numbers indicate that the extreme cost-cutting measures put in place by companies amid the recession -- most importantly through layoffs -- has meant that they can cut prices as well.
But all the layoffs, and the resulting 10.2% unemployment rate, has of course also meant that demand for consumer goods remains light. Fed Chairman Ben Bernanke noted as much
, when he made the obvious point that continued high rates of joblessness will slow any nascent economic recovery.
The economy, boosted by federal stimulus spending, showed 3.5% GDP growth in the previous quarter ending in September, but the most recent data appears to show that growth has slowed.
Still, a bevy of corporate behemoths used the third-quarter earnings season to declaim on how they see demand growing in their businesses during the fourth period and/or next year, including
and United Airlines' parent
-- Written by Scott Eden in New York
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