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Story developing. Stay tuned for updates.
The numbers: Industrial production fell 0.6% in October, the Federal Reserve reported Thursday.
The drop was larger than the 0.4% decline forecast by economists surveyed by the Wall Street Journal.
Much of the decline was due to the 10% drop in output for motor vehicles and parts tied to the United Auto Workers strike against the Big Three domestic producers, the Fed said.
Key details: Manufacturing alone fell 0.7%, but it was up 0.1% excluding the auto sector.
In other sectors, utilities output fell 1.6% in October. Mining output, which includes oil and natural gas, rose 0.4% after a flat reading in September.
Defense orders continued to trend higher, rising 1.7%. That’s the 10th consecutive monthly increase.
Capacity utilization moved down to 78.9% in October down from 79.5% in the prior month.
Big picture: “The outlook for factory output is unclear; higher borrowing costs and weaker demand for goods are headwinds for manufacturing. However, a stabilization in demand at lower levels coupled with onshoring of supply networks and infrastructure spending could be supportive of factory activity over coming months,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Market reaction: Stocks
DJIA
SPX
opened lower on Thursday while the 10-year Treasury yield
BX:TMUBMUSD10Y
dropped 6 basis points to 4.48%.
Read the full article here