A week that features a litany of economic data against the backdrop of Wall Street wondering what is going to come of the meeting of the Federal Open Markets Committee on Tuesday and Wednesday got off to a good start as the Federal Reserve reported that industrial production rose above a pre-recession high in November, surpassing the previous record set in December 2007.  The report is the latest sign that the U.S. economy is gaining strength heading into 2014 and gives the Fed more supportive data to soon begin tapering its stimulus package of buying $85 billion each month in Treasuries and mortgage-backed securities.

The central bank said that industrial production, which measures production at the nation’s mines, factories and power plants, rose 1.1 percent in November, marking its biggest one-month gain since last November (+1.3%) after a 0.1-percent increase in October.  Economists were anticipating a 0.5-percent rise.

Compared to November 2012, industrial production was up by 3.2 percent.  Compared to lows in June 2009, industrial production has climbed 21 percent.

Manufacturing output, which comprises about 75 percent of industrial production, improved by 0.6 percent in November, it’s fourth straight monthly advance. 

A cold spell across the country created greater demand for heat, lifting the utilities index by 3.9 percent in November.  While utilities provided a big lift, the gains were widespread, including a 1.7-percent increase in production at mines, reversing a decline of 1.5 percent in October.  Topical Storm Karen sweeping across the Gulf of Mexico temporarily shuttered oil and gas production in the region during October.  Production of automotive products rose 3.3 percent, and the production of home electronics climbed 2.6 percent in November.

On the downside, the output of business equipment fell 0.5 percent in November after three consecutive monthly gains, although it was still 2.2 percent higher than a year earlier.  The output of defense and space equipment also declined (-0.8%) following three straight months of rising.

Industrial capacity utilization, a measure of how much of factory resources are being used, increased 0.8 percentage points to 79.0 percent.  At 79 percent, capacity utilization is 1.2 percent points below its long-run (1972-2012) average.

Other reports issued separately on Monday suggested that the U.S. economy continues to mend, albeit very slowly.  The Empire State Manufacturing Index rose to 0.98 in December from -2.21 in November.  Readings above zero signal improving manufacturing conditions in the New York region.  Markit’s “flash” purchasing manager’s index edged down to 54.4 in December from an eight-month high of 54.7 in November.  Readings above 50 indicate expansion in factory activity.

The markets are moving higher in Monday morning action following the reports after posting losses in excess of 1 percent last week.  The Dow is up 145 points, the S&P 500 has climbed 12 points and the Nasdaq has advanced 30 points coming up on the noon hour.