US industrial production rose in September and a gauge of manufacturing in New York State hinted at stabilisation in October, data showed on Monday, suggesting the factory sector will keep supporting the economic recovery. Recent better-than-expected data have tamped down fears the economy is heading for another recession, and economists have lifted their estimates for economic growth in the third quarter.
"Broadly these numbers reinforce other data lately that show the economy is still growing. Recession fears are not being realised, so far at least," said Jim O'Sullivan, chief economist at MF Global in New York. Industrial production rose 0.2 percent last month, in line with expectations, as a gain in manufacturing offset a drop in utility output, a Federal Reserve report showed. August's reading was downwardly revised to show flat output.
Manufacturing production rose 0.4 percent, with consumer durables rising 0.9 percent as production rose for automotive products and home electronics. "Despite signs of a slowdown in global economic growth, US manufacturing output is still expanding at a solid pace," Paul Ashworth, chief US economist at Capital Economics, wrote in a note. While the pace of growth in manufacturing slowed in recent months - and in some regions contracted - September's broader national report pointed to continued support for a recovery.
The Empire State's business conditions index was up slightly in October at minus 8.48 from minus 8.82. Economists polled by Reuters had expected a reading of minus 4.0. New orders rose to 0.16 from minus 8.0. Employment gauges were mixed as the index for the number of employees rose to 3.37 from minus 5.43, but the average employee workweek index fell to minus 4.49 from minus 2.17.
"While the headline was weaker than expected, nearly matching last month's dismal disappointment, the details are in fact firmer with gains in new orders, shipments, employees," David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut, wrote in a note.
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