Factories, mines and utilities cranked up another notch in October and operated at a tight 84 percent of capacity, the most frenzied pace since February 1980, the Federal Reserve reports.

For manufacturing alone, factories were churning at 84.3 percent of their limit, the highest since July 1979, when the rate was 84.7 percent, the Fed said.During the last economic expansion, the manufacturing operating rate peaked at 86 percent in March 1979, the Fed said.

The overall operating rate of 84 percent, matching the February 1980 level of 84 percent, included slightly higher operating rates for utilities compared with September and was somewhat dampened by a 0.6 percent drop in mining operating rates.

The capacity utilization rate is closely watched by federal regulators for signals that factories are reaching the limit of what they can produce without either expanding or becoming unable to meet demand. Resulting shortages could set off a spurt of price increases.

Other economic reports this week have indicated the economy is still surging forward.

The Fed Tuesday reported industrial production had increased 0.4 percent in October, and the Commerce Department said retail sales, sluggish for most of the year, had leaped forward 0.9 percent in October.

Because factories are still grinding up against historically high operating rates and both foreign and domestic demand show no signs of abating, the Fed may be inclined to keep interest rate pressure on to give factories some breathing room.

Factories producing big-ticket items, such as cars and appliances, were responsible for most of the increased manufacturing activity, the Fed said.

Operating rates in these industries have climbed nearly 3 percentage points in 1988, while the rate for producers of more quickly consumed goods, such as food and clothing, have been high but stable for most the year, the Fed said.

The largest contributor to the increase was the automotive industry, where uneven gains throughout the year have pushed operating rates to the highest level since 1985. The current rate is sill below the highs the industry attained in 1978.