US industrial production rose only 0.1% in October following an increase of 0.6% in September, the Federal Reserve said today in Washington.

Manufacturing production fell for the first time in four months, while utility output rose 1.6%.

Car production fell following the biggest three-month gain since the 1970s and companies are remaining cautious about the sustainability of the recovery with unemployment at its highest since 1983.

The labour market explains why “significant economic challenges remain,” Federal Reserve chairman Ben Bernanke said in New York, on Monday.

At 98.6% of its 2002 average, total industrial production was 7.1% below its level of a year earlier. Capacity utilization for total industry moved up 0.2 percentage point to 70.7%, a rate 10.2 percentage points below its average for 1972 through 2008, and capacity utilization for manufacturing was unchanged at 67.6%.

The production of consumer goods was unchanged in October, as a decrease in the production of durables was offset by a gain in nondurables. A decline of 1.4% in the index for durable consumer goods reflected decreases in all of its major components, including a drop of 2.0% in the output of automotive products. Assemblies of light motor vehicles edged down to an annual rate of 6.8 million units in October after having climbed from 4.1 million units in June to 7.1 million units in September.

The index for consumer nondurables moved up 0.3% in October, as an increase in non-energy nondurables more than offset a decrease in consumer energy products. The advance in non-energy nondurables resulted from gains of around 1% in the production of foods and tobacco and of chemical products; the output of clothing and of paper products decreased.

The index for business equipment moved down 0.2% in October. This decline was driven by a decrease in the output of information processing equipment; the indexes for the transit and the industrial and other categories were unchanged. Production of defense and space equipment declined 0.2% after three months of gains of more than 1.0%.

Among nonindustrial supplies, the production of construction supplies fell 1.2% in October after a similarly sized decrease in September. The output of business supplies rose 0.1% a decrease in general business supplies mostly offset an advance in sales of electricity to commercial businesses that boosted the output of commercial energy products. The production of materials moved up 0.3%.