WASHINGTON — Hurricane Sandy depressed industrial output in the United States in October, while production of machinery and equipment in particular declined sharply, reflecting a more cautious outlook among businesses, the Federal Reserve said Friday.
Industrial production fell 0.4 percent last month, after a 0.2 percent gain in September, the Fed said. Excluding the hurricane’s impact, output at the nation’s factories, mines and utilities would have risen about 0.6 percent.
Factory output, the most important component, fell 0.9 percent and would have been unchanged without the storm, the Fed said. Utility output dipped 0.1 percent, while mining, which includes oil and gas production, rose 1.5 percent.
Manufacturing has weakened since spring, in part because companies have scaled back purchases of long-lasting goods that signal investment plans. That trend appeared to continue in October: machinery production fell 1.9 percent, while production of electrical equipment, appliances and components declined 1.4 percent.
Many businesses are worried about tax increases and federal spending cuts that will take effect in January unless Congress reaches a budget deal before then. Most economists predict the economy will suffer a recession in the first half of 2013 if lawmakers and President Obama can’t come to an agreement..
Hurricane Sandy also hurt the economy, although most economists expect the storm’s impact to fade in the coming weeks. The storm hit the Northeast on Oct. 29 and disrupted businesses from North Carolina to Maine.
Industrial Production Declines
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Industrial Production Declines
