The U.S. Federal Reserve reported the country's industrial output fell substantially in October 2002, by 0.8%. Such a drop, following declines in the previous two months, raises the possibility that U.S. manufacturers are seeing another recession.

While industrial production also declined in August and September, October's drop was quadruple the 0.2% declines recorded in those two months.

The recent lockout at west coast shipping ports, said the Fed, probably had no significant impact on the manufacturing numbers -- instead, weakening demand is broad-based rather than confined to any particular sector. The Fed also noted manufacturing demand is not expected to improve in the near term.

Industrial capacity utilization was reported at 75.2% in October.

Separately, the manufacturing employment picture is mixed. Nondurable manufacturing is reportedly employing more people in October, while durable goods (such as bearings and related products) or heavy manufacturing was, "treading water."

Also separately, the U.S. Department of Commerce released September business inventory statistics. Business inventories grew by 0.5%, to an adjusted $1.13 trillion. However, net business sales also fell by 0.5% in September, zeroing the effect. In fact, manufacturers are not yet rebuilding inventories to pre-recession levels -- September's inventory/sales ratio remained relatively steady at 1.36, still down significantly from 1.45 in September 2001.