Manufacturing output continues to expand

US October Industrial Production was unchanged, according to the Federal Reserve, disappointing market expectations of a 0.3% increase. This weakness, however, was mostly due to unusually mild weather which caused utility output to drop 3.4%. The above chart shows the index for manufacturing activity (a subset of the larger industrial production index), which rose 0.6% in October and is up 6.2% in the past year. Over the past six months, manufacturing activity has expanded at a 4.5% annual rate—no sign of any significant slowdown or double-dip here. I note that the rebound in manufacturing activity following the 2008-09 recession has been much stronger than the rebound following the 2001 recession, even though activity is still about 9% below its late 2007 peak. We've got a ways to go before breaking new high ground, but we're making progress at a decent rate.