US manufacturing rises, but auto production declines

Aircraft technicians assemble an S-76D helicopter at in Sikorsky Global Helicopters in Coatesville, Pennsylvania, October 16, 2014.
Mark Makela | Reuters

U.S. manufacturing output rose in October, but a third straight month of declines in motor vehicle production suggested some slowdown in the pace of factory activity.

Factory production increased 0.2 percent last month after a downwardly revised 0.2 percent rise in September, the Federal Reserve said on Monday.

Economists polled by Reuters had forecast manufacturing output rising 0.3 percent in October after a previously reported 0.5 percent gain in September.

Motor vehicle output fell 1.2 percent in October. That followed September's 1.9 percent drop and was the third consecutive month of declines.

Mining output dropped 0.9 percent last month, while utilities production fell 0.7 percent.

Those declines eclipsed the gains in manufacturing, leaving overall industrial production slipping 0.1 percent in October. September's increase in industrial output was revised down to 0.8 percent from 1.0 percent.

The amount of manufacturing capacity in use slipped to 77.2 percent last month from 77.3 percent in September.

Overall industrial capacity use fell to 78.9 percent from 79.2 percent in September. It was 1.2 percentage points below its long-run average.

Officials at the Fed tend to look at capacity use as a signal of how much "slack" remains in the economy and how much room there is for growth to run before it becomes inflationary.