U.S. manufacturing output was up for October as demand for vehicles and big ticket items seemed to have rejuvenated the sector somewhat.
U.S. manufacturing output rose surprisingly in October at 0.4 percent and was a huge surprise for analysts and economists who weren’t expecting such a figure. Manufacturing in the country had been on the decline in recent months mostly due to low oil prices and a strong dollar overseas.
The Federal Reserve released the new figures on Tuesday. The strength of the dollar overseas as well as weak demand and slowing economies from foreign countries has meant that domestic manufacturers have had to count on American consumers to lift them out of this slow period, according to Bloomberg.
Manufacturing growth had slowed and declined in the past months mainly because most factories and retailers were saddled with huge inventories that they were hoping to pare down as soon as possible. Manufacturers are hoping for some growth in wages in the near future to spark a renewed confidence in the economy by consumers. Demands for vehicles and for big ticket items like appliances have seemed to been saving the manufacturing sector of late.
Analysts are quick to say that manufacturing seems to be pulling out of a period of non-growth or decline. They also believe that the drag on inventories has ended or is near ending. Manufacturing output was up overall 1.9 percent over last October. Manufacturing output accounts for over 75 percent of the economy and as goes manufacturing so goes the country’s economy.
Bloomberg polled 80 economists and the prevailing opinion was that manufacturing growth would only come in at 0.1 percent for October. American factories in October were working at 76.4 percent capacity. Mining and utilities were down significantly in October. The utility stagnation was due mostly to above normal temperatures throughout much of the country in October.
Once again, vehicle production and auto parts seems to be keeping the manufacturing sector afloat. Vehicle and parts production was 0.7 percent last month and manufacturers sold 18.1 million vehicles in October.