US factory production rose in September on firmer output of consumer goods, suggesting manufacturing is stabilizing.

The 0.4% increase in factory output last month followed a revised 0.1% drop in August, according to Federal Reserve data published Tuesday. Total industrial production, which also includes mining and utilities, rose 0.3%.

The median forecasts in a Bloomberg survey of economists called for no change in both factory output and total industrial production.

The pickup in factory output suggest manufacturing is finding some footing as retailers make progress getting inventories more in line with demand. At the same time, producers are contending with the headwinds of higher borrowing costs, tepid overseas economies and uneven capital goods orders.

While recent factory purchasing managers survey data suggest the pace of decline has started to moderate, cost pressures continue to linger. On Monday, a survey of New York manufacturers showed prices paid for inputs remained elevated while the share expecting higher prices received dropped to a three-year low.

The Fed's industrial production report showed motor vehicle assemblies rose to 11.06 million units on an annualized basis last month, despite the United Auto Workers strike. Output of consumer goods climbed 0.3%, fueled by a pickup in output of appliances and furniture.

Production of business equipment fell 0.7%, while output of construction supplies jumped 1%.

Utility output fell 0.3%, while mining production rose 0.4%.

Capacity utilization at factories ticked up to 77.8%, while overall utilization increased to 79.7%, a five-month high.

Source : Bloomberg