U.S. industrial production was reported weaker than expected today, falling 1.1% in October, the 13th straight month of decline.

Over two-thirds of industries cut output during the month, the most widespread decline so far in the recession, observes BMO Nesbitt Burns. “Production in the technology sector was off 0.7%, but the post-tragedy problems for basic industry deepened with output off 1.3%. And, the drop in oil prices has reversed one of the strong areas of the economy — energy exploration. Activity in the sector fell for the first time since July, drying up 0.6%.”

At the same time, capacity utilization continued its erosion, slipping to 74.8%. This means that more wholesale price deflation lies ahead, says BMO, noting that the low level of capacity usage will also encourage further capital spending cutbacks.

“The severe decline during October suggests that manufacturers are still struggling with falling orders and inventory cutbacks. That leaves the road open for the Fed to ease further when it meets in early December,” says BMO, noting that the U.S. economy is now experiencing its longest losing streak in the post-war period.