“It looks like Fed officials were smart to stop their gradual rate hikes as the economy seems to have entered a soft patch,” an economist says.
The positive industrial numbers support the notion that the U.S. economy grew at a robust pace in the April-to-June period.
"The outlook for the U.S. manufacturing sector is still bright, in part because rising oil prices will lead to more U.S. production."
Production grew 1.0% in April, the biggest gain in more than three years and a sign of underlying economic strength.
The larger-than-expected decline, which followed a 0.1% gain in October, suggests the sector "is still just treading water."
The manufacturing sector helped output rebound from August's decline and economists expect modest growth to continue.
Output fell a larger-than-expected 0.4% last month despite the dollar's rally fizzling out and a rise in oil prices.
The company is investing at least $1.4 billion in industrial projects as part of Saudi Arabia's plan to reduce its dependence on oil.
Demand for electricity and natural gas returned to a more normal level, and manufacturing output rose 0.3%.
The larger-than-expected decline in production is more evidence that economic growth has cooled since the start of the year.
The larger-than-expected decline reflects sharp drops in the mining and utilities sector that outweighed an increase in manufacturing.
Industrial production was up 0.6% in July but the manufacturing sector as a whole rose only 0.1%.
