U.S. industrial production cut

Press, 23 October 1984, Page 38

U.S. industrial production cut

NZPA-Reuter Washington United States industrial production dropped 0.6 per cent in September after expanding for 21 straight months, the Federal Reserve Board announced. About half of the unexpectedly steep decline was a reflection of the car industry, where a one-week strike at General Motors and inadequate supplies of parts reduced work at assembly plants. But production was scaled back in other important sectors and economists said this reflected the general moderation in business activity that began over the summer. “The rapid growth is be-

hind us,” said Mr Robert Ortner, the chief economist at the Commerce Department. Mr Michael Evans, who heads a private economic consulting firm in Washington, said it was clearly a sign of a slow-down. They and other economists saw slower growth as a healthy development which will prevent inflation from flaring up and help encourage interest rates to go down. Many major American banks reduced their prime lending rates from 12.75 per cent to 12.5 per cent earlier this week. A cut in this key rate often precedes reductions in other borrowing costs.