U.S. manufacturing rose for the first time in three months in October as producers increase production of motor vehicles and construction materials. In total, manufacturing advanced 0.4%, which exceeded the median forecast of analysts.
Industrial production as a whole saw an unexpected drop of 0.2% for the second straight month as unseasonably warm weather reduced the demand for electricity.
With a stronger dollar and weaker global growth, manufacturers in the United States are relying on domestic consumers to reduce their bloated inventories. Demand for big-ticket items, such as autos, have been bright spots for manufacturing. Wage growth may also boost consumer confidence, encouraging them to spend more.
The median forecast for manufacturing was up 0.2% in October. The figure was a 1.9% increase over production output in October of last year, but lower than the 2.4% average at the start of 2014.
Industrial production was expected to rise 0.1%, and estimates ranged from 0.5% decline all the way up to an increase of 0.4% .
Mining production, which includes oil drilling, declined 1.5% in October following a 2.4% decline in September. Utility output also dropped 2.5% in October, the biggest drop since April. October was the warmest month since 1963, and 14 states experienced above average temperatures throughout the month.