U.S. Industrial Production Declined Slightly in October

Industrial production in the U.S. declined in October, highlighting the sector's increasing headwinds as higher interest rates weaken demand for goods even as supply-chain bottlenecks gradually ease.

Industrial production--which includes manufacturing, mining and utility output--decreased 0.1% in October on month, swinging from a downwardly revised 0.1% advance in September, data from the Federal Reserve showed Wednesday. Industrial production figures are adjusted for inflation.

Economists polled by The Wall Street Journal expected industrial production to increase by 0.1%.

A slight gain in manufacturing output was offset by weaker mining and utilities production, the data showed.

Manufacturing output--the biggest component of industrial production--rose 0.1% on month in October from a 0.2% increase in September. Manufacturing of durable goods, those meant to last for at least three years, rose 0.5% on month, with production of motor vehicles and parts accelerating 2%.

The U.S. industrial sector has remained strong in the last few months, but economists don't expect this resilience to last long as pent-up demand fades and inventories rise.

"Vehicle producers still have a lot of catching up to do, but that is looking like one of the few supports for the manufacturing sector in the months ahead," Regions Financial Corp.'s chief economist Richard F. Moody said in a note ahead of the data release.

Mining production fell 0.4% in October as a drop in oil and gas extraction outweighed improvements in oil and gas well drilling and in coal mining, the Fed said. Utilities output decreased 1.5% driven by a fall in electric utilities, it said.

Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, decreased to 79.9% in October from 80.1% in September.