The policy stance could, over time, also provide substantial support to the economy indirectly, by mitigating the likely driving forces behind the diminished interest-rate sensitivity of
durable goods spending.
Thus the so-called
durable goods monopoly commitment problem may actually occur in non-durable goods industries as well.
The output of
durable goods industries moved up 0.2 percent, with the production of transportation equipment advancing 0.9 percent.
Equation (2) indicates that the
durable goods inventory consists of only the new goods purchased in the previous period, since the used units have expired.
Continuing the pattern of the past several months, the gains in manufacturing output were concentrated in
durable goods. Gains were widespread, with only the lumber, primary metals, and motor vehicles and parts industries declining appreciably; increases were especially strong in computers and electrical machinery.
As in the past few months, much of the strength in manufacturing reflects the increased output of
durable goods; the production of nondurables remains little changed from the end of last year.
When analyzed by industry group, the data show that factory output increased 0.8 percent after a revised 0.2 percent loss in October; the production of
durable goods increased 1.2 percent, while that of nondurable goods rose 0.3 percent.
The production of
durable goods materials fell 1.0 percent, largely because of a drop in parts and materials used primarily by the motor vehicle industry.
Meanwhile, on a quarterly average basis, growth in industrial production slowed from an annual rate of 6.7 percent in the second quarter to 4.4 percent in the third quarter, with the slowdown evident in most major market groups except nondurable consumer goods and
durable goods materials.
The drop in the output of durable consumer goods reflected decreases in the output both of automotive products and of other
durable goods. Motor vehicle assemblies fell 0.7 million units from their July level, to 12.6 million units (annual rate).
Excluding do 3 percent gain in utilities production, the index of industrial production rose 0.5 percent, led by sizable gains in business equipment and
durable goods materials.
Despite an increase in the production of appliances, the output of consumer
durable goods other than automotive products decreased 0.5 percent, with weakness in furniture and miscellaneous consumer goods.