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Industrial production rises
Gain in output of nation's factories, mines and utilities matches forecasts; capacity use still low.
October 16, 2003: 3:37 PM EDT

NEW YORK (CNN/Money) - Production from the nation's factories, mines and utilities rose at a faster pace in September, the Federal Reserve said Thursday.

The report showed industrial production rose 0.4 percent in September after rising 0.1 percent in August. Economists, on average, expected production to rise 0.4 percent, according to Briefing.com.

Capacity utilization, the percentage of production capacity factories used in the month, was 74.7 percent, compared with 74.6 percent in August. Economists expected a capacity utilization rate of 74.8 percent, according to Briefing.com.

"U.S. industrial activity is improving, but it can't be described as healthy just yet," said Sherry Cooper, chief economist at BMO Nesbitt Burns.

The report had little impact on U.S. stock market prices, which were mixed in early trading. Treasury bond prices rose, driven in part by signs of weak inflation in the latest consumer price index (CPI).

The Labor Department said Thursday that the year-over-year change in the CPI was just 1.2 percent, the lowest rate in more than 37 years.

Separately, the Labor Department said that, although the number of new weekly claims for unemployment benefits fell last week, the number of people drawing benefits for more than a week grew -- meaning that, even though layoffs have slowed down, new hiring has yet to begin.

Some Fed officials have suggested that low inflation, a weak job market, and low capacity utilization are signs the economy has a lot of "slack." According to this view, demand will need to pick up more, resulting in greater factory output and capacity use, before companies will see stronger pricing power and a need to hire workers.

In the Fed's report Thursday, factory output increased 0.7 percent, its strongest gain since a matching 0.7 percent in April 2000. Most of the gain in factory output was due to a 6.6-percent jump in production of motor vehicles and parts. Output of non-durable goods fell 1.3 percent.

Mining output was flat, and utility output fell 2.2 percent.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.