“Industrial production increased 1.3 percent in October and manufacturing production rose 0.6 percent in October after both sectors fell 3.7 percent in September,” said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. “ The October improvement is not anything to cheer about. Hurricane Ike and the Boeing strike severely disrupted production in September and the resumption of oil and chemical production in October boosted production. The Federal Reserve estimates that without the hurricane and strike, industrial production would have fallen 2/3 percent in both September and October and manufacturing production would have declined 1 percent each month.
“Proof of deteriorating business conditions in the manufacturing sectors is the pervasiveness of the decline across the vast majority of manufacturing industries—16 major manufacturing industries declined and only four increased,” he added. “The financial crisis hurts business financing of capital projects and the loss of jobs and wealth depress consumers’ willingness to spend. Both business and consumers are deleveraging away from debt, and also lack confidence in the short term economic outlook. Unfortunately, economic fears tend to become self-fulfilling.”