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Factory Production Falls As Strikes Drive 10% Plunge In Autos

US factory production fell in October by more than expected, largely reflecting a strike-related pullback in activity at automakers and parts suppliers.

Output decreased 0.7% last month, the most in four months, weighed down by a 10% drop in motor-vehicle production, Federal Reserve data showed. Excluding autos, manufacturing rose 0.1%.

Total industrial production, which includes mining and utilities, fell 0.6%.

Starting in September, the United Auto Workers union authorized targeted strikes against the Big Three Detroit automakers, disrupting production at the companies and at their suppliers. The UAW reached tentative agreements with management in late October, laying the groundwork for a rebound in factory output in November.

The annualized rate of car assemblies dropped to 9.22 million units, the least since February 2022.

Recent factory surveys have indicated tepid new orders, including the latest Fed poll of New York manufacturers, which also showed growing concerns about the future. Looking ahead, factories will have to continue to weather cooling economic activity abroad, elevated interest rates at home and an uncertain economic outlook.

Thursday’s figures showed capacity utilization at factories, a measure of potential output being used, fell to 77.2%, the lowest level of the year. Overall utilization also declined.

Utility output fell for a second month, while mining production increased.

Meanwhile, the Fed’s index of defense and space equipment jumped 1.7%, to a fresh record high.

This article was provided by Bloomberg News.



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