U.S. manufacturing output and industrial production rebounded sharply in November, beating economists’ expectations and ending a two-month period of softness.
Manufacturing production rose 1.1 percent in November, more than reversing the upwardly revised seven percent decline in October, the Federal Reserve said Tuesday. Economists had expected a less than 1 percent rebound following the end of the strike by General Motors autoworkers.
Highlighting the role of the strike, which put around 46,000 workers off the job until it ended in late October, production of motor vehicles and parts jumped 12.4 percent. Excluding this, manufacturing production rose 0.3 percent.
Manufacturing of business equipment also showed a strong rebound, rising 1.7 percent. This has been touch-and-go in recent months, falling in three out of the last six months. But November’s recovery is the strongest growth pace of growth since June of 2018, perhaps indicating that business investment is gaining strength and on a stronger footing.
Production of consumer goods jumped 2.1 percent higher, ending a three-month losing streak. That is the largest monthly jump since August of 1998. For reasons not entirely understood, this has become a much more volatile category in the wake of the financial crisis and recession.
Mining production slipped 0.2 percent. The output of utilities increased 2.9 percent after falling 2.4 percent in October.
Overall industrial production–which is the combination of manufacturing, mining, and utilities–rose 1.1 percent, also beating expectations. The October figure was revised down one tick to a 0.9 percent contraction.
Excluding motor vehicles and parts, overall industrial production rose 0.5 percent.
Capacity utilization, a measure of how fully industrial companies are using their resources, rose 0.7 percentage points to 77.3 percent in November from a downwardly revised 76.6 percent in October. That was in line with expectations.