US industrial production expected to have increased slightly in October

Economic Indicators Associated Press

The Federal Reserve reports on industrial production for October. The report will be released Monday at 9:15 a.m. Eastern.

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MORE OUTPUT: Economists expect that industrial production rose a meager 0.2 percent in October, according to a survey of economists by data firm FactSet.

GAINS HELP GROWTH: Manufacturing has steadily helped fuel growth for much of 2014. Employers have added more than 2.2 million jobs so far this year and the unemployment rate has plunged to a six-year-plus low of 5.8 percent. Stocks have rebounded in the past month to record highs after having slipped in the middle of October. Rising auto sales have kept assembly lines busy, while demand for home electronics, appliances, furniture and carpeting have all perked up.

That growth faces new challenges because of a broadening slowdown in Europe, China and Japan. On Monday, Japan unexpectedly slid back into recession, sending global markets downward. As economies overseas have struggled, the demand for American-made goods has waned. So far, greater domestic demand has more than offset the declines from abroad.

Factory output rose a solid 0.5 percent in September. The gains contributed to overall industrial production climbing 1 percent that month, which was also buffered by gains in the mining and utility sectors.

Over the past 12 months, factory output has risen 3.7 percent. That increase has trickled into hiring and new paychecks that have bolstered growth in the broader economy. Factories added 170,000 jobs that pay on average more than $19 an hour, according to the Labor Department.

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But other manufacturing indicators have been uneven in recent months.

Manufacturing firms are increasingly confident, according to the Institute for Supply Management, a trade group of purchasing managers.

The organization's manufacturing index rebounded to 59 last month from 56.6 in September. Any reading above 50 signals expansion. The result matched a three-year high reached in August and reversed a September drop, all of which suggests that factory output will continue to drive growth.

Out of 18 sectors in the index, only petroleum and coal reported that activity had decreased. Manufacturing exports grew last month but at a slower pace than September.

At the same time, more Americans are buying autos.

Sales rose 6 percent in October from a year ago, according to Autodata Corp. Helped by lower gas prices, more buyers decided to buy vehicles from GM, Toyota, Chrysler, Nissan, Volkswagen and Honda last month.

Other indicators show, however, that assembly lines are slowing.

Orders to U.S. factories have fallen in September and August, the Commerce Department reported earlier this month.

Those declines largely came from a drop-off in demand for aircraft, an extremely volatile category month-to-month. Excluding the volatile transportation sector, factory orders have been flat for the past two months.