Industrial output drops 0.2% in September

U.S. industrial output shrank last month for the first time in more than a year, a sign the economy was in a slow-growth rut that appears certain to lead to more monetary stimulus from the Federal Reserve.

Another report Monday showed home-builder sentiment rose this month but remained at depressed levels, fortifying views that the Fed, the U.S. central bank, would pump more money into the economy at its next policy meeting Nov. 2 and 3.

Industrial production fell 0.2% in September, the first decline since June 2009, the Fed said. Economists had expected industrial production to rise 0.2%, the same as in August.

Separately, the National Assn. of Home Builders/Wells Fargo Housing Market Index rose three points to 16 in October, beating economists’ expectations for a 1-point rise to 14.

A reading below 50 indicates that more builders view sales conditions as poor than good. The index has not been above 50 since April 2006.