Industrial Output Makes Solid Gains

The nation’s industrial output advanced solidly in October, propelled by broad-based gains in computers, industrial machinery and a variety of consumer goods.

Production at the nation’s factories, mines and utilities rose 0.5 percent, the same as in September, pushing the industrial operating rate to 84.3 percent of capacity - the highest level since March 1995, the Federal Reserve said Monday.

Still, the inflation-sensitive bond market found the report reassuring because it was a shade less robust than expected. The Dow Jones industrial average of 30 stocks rose 125.74 points, or 1.7 percent, to 7,698.22.

The industrial operating rate reached a level that has signaled inflationary bottlenecks in the past, but price pressures still are scarce. That’s because U.S. capacity isn’t strained in every industry and, where it is, such as the steel industry, often there’s plenty of worldwide capacity, said economist Ken Mayland of KeyCorp in Cleveland.