In October, industrial production rose 1.3% M/M, while the consensus was looking for a more modest increase (0.2% M/M). The previous figure was downwardly revised from -2.8% M/M to -3.7% M/M. Most of the rebound was due to an improvement in manufacturing (0.6% M/M from -3.7% M/M), but also mining (6.1% M/M from -8.5% M/M) recovered. Utilities rose 0.4% M/M in October (from 2.4% M/M). Looking at the manufacturing sector, durables dropped 1.8% M/M (from -3.1% M/M), while non-durables showed a significant rebound (3.1% M/M from-4.5% M/M) due to climbing petroleum and coal products (9.9% M/M from -8.5% M/M) and chemicals (5.1% M/M from -8.3% M/M). The Fed added that the decline was due to refineries and oil rigs restarting their operations after the hurricanes Ike and Gustav. Excluding the effects of the hurricanes and strike at Boeing, output would have contracted by about 0.7% M/M in October and September.
The New York Empire State manufacturing survey showed a further weakening of conditions in November. The headline index fell from -24.62 to -25.43, the lowest level since series began in 2001. Looking at the details, the number of employees (- 28.92 from -3.66) and average workweek (-25.3 from -9.76) deteriorated sharply. But also new orders (-22.21 from -20.45); shipments (-13.89 from -8.85), inventories (- 26.51 from -17.07) and unfilled orders (-24.1 from -12.2) worsened significantly. Both prices paid (20.48 from 31.71) and prices received (6.02 from 20.73) declined sharply. Although the headline index showed only a modest further deterioration, the details painted a bleaker picture.
