Even with the improvement, the operating rate is still one percentage point below the 81.5 percent average of the last two decades.

Last month, the operating rate in the auto industry fell by 1.2 percentage points, to 76.7 percent of capacity.

For the last two decades, the operating rate has averaged 82 percent of capacity.

But the higher rate is still well below the 79.6 percent average operating rate over the last 20 years.

The nation's industrial operating rate declined 0.2 percent last month, the first drop since September.

Last month's operating rate was down from 83.7 percent a year earlier.

That is the nation's highest operating rate in almost eight years.

The operating rate is closely watched as a sign of possible future inflation.

In October 1986, the operating rate was just 79.1 percent.

That pushed the operating rate of American industry to another 15-year peak, the highest level since 1979.