Industrial Production in U.S. Probably Stagnated in October

Industrial production in the U.S. stalled last month as slowing sales prompted factories to make less clothing, furniture and appliances, economists said before a report today.

Production at manufacturers, mines and utilities rose 0.1 percent, the same as in September, according to the median forecast in a Bloomberg survey of economists. Capacity utilization, which measures the proportion of plants in use, fell to 82 percent from 82.1 percent the prior month, economists said before the Federal Reserve's report.

The figures suggest the biggest housing slump in 16 years may be starting to spill over to other industries. A weaker dollar and stronger growth abroad is boosting demand from overseas, keeping factory output from tumbling.

``Soft manufacturing production is reflecting overall slowing in demand,'' said Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York. ``We look for a relatively soft reading.''

Economists' projections ranged from a decline of 0.5 percent to a gain of 0.3 percent. The Fed will release the report at 9:15 a.m. in Washington.

Retail sales increased 0.2 percent in October following a 0.7 percent increase the prior month as Americans skimped on furniture and sporting goods, a report this week from the Commerce Department showed. The slowdown suggests rising fuel prices and falling property values are leaving shoppers with little extra cash to spend on non-essentials.

Whirlpool Corp., the world's largest appliance maker, said last month that third-quarter sales in North American fell 8 percent as the housing slump hurt demand for refrigerators and dishwashers.
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