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U.S. industrial output up 0.6 percent in November, manufacturing flat

Tuesday, December 18, 2018

WASHINGTON (Reuters) - U.S. industrial output rose in November as a jump in mining and utilities production was offset by drops in other sectors including business equipment and construction.

The Federal Reserve said on Friday industrial production rose 0.6 percent last month. But data for October was revised downward to show that output fell 0.2 percent instead of advancing 0.1 percent as previously reported.

Economists polled by Reuters had forecast industrial output to rise 0.3 percent in November.

Motor vehicle and parts production rose 0.3 percent after falling 3.1 percent in October. Excluding motor vehicles and parts, industrial output rose 0.6 percent last month after being unchanged in October.

Manufacturing output was unchanged in November after a downwardly revised 0.1 percent drop in October.

Manufacturing, which accounts for about 12 percent of the economy, is being supported by a strong domestic economy. But growing capacity constraints amid labor shortages and more expensive raw material are slowing momentum. A strong dollar and cooling global growth are restraining exports.

November’s industrial production was bolstered by a 1.7 percent rise in mining and a 3.3 percent increase in utilities as unseasonably cold weather supported heating demand, the Fed said.

Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, dipped to 75.7 percent in November, from 75.8 percent in October. Overall capacity use for the industrial sector rose to 78.5 percent in November from 78.1 in October.

Officials at the Fed tend to look at capacity use measures for signals of how much “slack” remains in the economy — how far growth has room to run before it becomes inflationary.

Reporting by David Lawder; Editing by Paul Simao

Our Standards:The Thomson Reuters Trust Principles.