Manufacturing was up by 0.5%, coming on the heels of a revised September increase of 0.1%, in figures released Tuesday. Originally September had been reported as a drop of 0.2%. Overall, however, production was unchanged; unseasonably warm weather cut demand for heating, and utility output dropped by 3.4%.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, pointed out in a statement that the consensus forecast was an increase of 0.3%. Capacity use, also unchanged at 74.9%, came in under consensus as well; 74.8% had been expected.
About the drop in utility output, Shepherdson said, “[W]e expected a decline but not that big. The key implication,” he added, “is that real consumers' spending on energy dropped sharply last month, probably by enough to subtract a tenth from the headline consumption number.” Regarding manufacturing output, however, he was positive: “[it] rose a healthy 0.5%, the best performance since July.”