Ahead of the Bell: US industrial production
WASHINGTON (AP) — The nation's factories, mines and utilities likely boosted production slightly in October but the gain was probably held back by adverse effects from Superstorm Sandy.
The expectation is that industrial production rose 0.2 percent, according to a survey of economists by FactSet. The report will be released by the Federal Reserve at 9:15 a.m. EST Friday.
In September, industrial production rose 0.4 percent. Factory output, the most important component, edged up 0.2 percent.
Manufacturing has slowed since spring, in part because companies have scaled back purchases of equipment and machinery. Many businesses worry about tax increases that would kick in next year if Congress fails to reach a budget deal by the end of December.
In the July-September quarter, factory production fell at an annual rate of 0.9 percent. That was the first quarterly decline since the spring of 2009, when the country was still in a recession.
Manufacturing, which helped pulled the economy out of the Great Recession, has slumped since the spring. Europe's debt crisis and slower growth in China and other emerging markets have hurt demand for American exports.
Adding to the problems with exports and uncertainty over taxes were the disruptions caused by Superstorm Sandy, which hit the East Coast on Oct. 29 and disrupted activity from North Carolina to Maine. The storm also cut power to roughly 8.5 million homes and businesses in 10 states. Some are still without power. Two regional manufacturing surveys released Thursday showed Sandy depressed manufacturing activity for a brief time after the storm hit.
There have been hopeful signs that the job market is improving. Employers added 171,000 jobs in October and hiring in August and September was stronger than first estimated. The economy has gained an average of 173,000 jobs a month since July. That's up from an average of 67,000 a month in April through June.
The unemployment rate rose slightly in October to 7.9 percent, up from 7.8 percent in the previous month, but that was because more Americans began looking for work, suggesting that people feel their chances for finding a job have improved.
Based on some positive reports, many economists have boosted their expectations for growth in the July-September quarter to around 3 percent, up from the government's initial estimate of 2 percent growth.