US industrial production up by 0.4pc in November with auto boost

U.S. industrial production increased 0.4 percent in November with manufacturing receiving a boost from a rebound in output at auto plants after three months of declines.

The Federal Reserve reported Tuesday that the November gain in industrial output followed an even stronger 0.9 percent increase in October. Even with the gains, industrial output is still about 5 percent below its level in February before the pandemic hit.

Manufacturing was up by 0.8 percent in November, its seventh consecutive monthly gain, with last month’s increase boosted by a rebound in auto production. Production of motor vehicles and parts gained by 5.3 percent, the biggest monthly increase since a 31 percent surge in July.

However, after that jump following spring lockdowns, auto production fell in August, September and October.

Output in the mining sector, which includes oil and gas production, was up by 2.3 percent while utility output fell by 4.3 percent, a decline that reflected unseasonably warm weather in November.

U.S. industry operated at 73.3 percent of capacity in November, still below the pre-pandemic rate of 76.9 percent in February.

“There are huge swaths of excess capacity throughout the U.S. economy that will make it difficult for firms to raise prices,” said Gus Faucher, chief economist at PNC Financial Services. “That in turn will keep inflation below the Federal Reserve’s 2 percent objective for the next couple of years, allowing the central bank plenty of leeway to keep interest rates extremely low to support the ongoing economic recovery.”-AP