US: Expect the industrial production to advance by about 0.3% in October - RBS

Research Team at RBS, notes that after falling by 0.5% in August, US industrial production edged up 0.1% rise in September and expects the production advanced by about 0.3% in October. 

Key Quotes

“Output in the factory sector may have increased again, perhaps by around 0.4% (0.3% excluding vehicles).  Light vehicle production appears to have been up in October after slipping in September.  Assorted indicators of manufacturing activity were mostly better in October.  Aggregate hours worked in the manufacturing sector advanced by 0.2%, and the ISM manufacturing index’s production gauge was at 54.6 (highest since July).  One blemish on an otherwise better month for the manufacturing sector was another decline in factory employment in October.  While it feels like the factory sector may be emerging from its funk, it’s probably too soon to get comfortable with the outlook for the sector.  Outside of the factory sector, weekly rig count data suggests that mining activity could have increased in October.  Utilities output, on the other hand, may have pulled back a bit in October, with risks tilted to the downside as Hurricane Matthew knocked out power in parts of the east coast.”

“As a result of the expected advance in overall production, capacity utilization likely edged up a couple of ticks to 75.6% in October. However, such a result would put utilization about 4 ½ points below its long-term average of 80.0%, suggesting a decent amount of idle or excess capacity.”