Output at U.S. factories, utilities and mines jumped in November, giving the biggest rise to industrial production in two years after a weak performance in October. The Federal Reserve reported in Washington on Friday that industrial production rose 1.1 percent in November following a revised 0.7 percent drop in October after an original report of 0.4 percent contraction in October.
Economists were only expected at 0.3 percent increase for November.
Manufacturing, which accounts for about three-quarters of all production, rose by 1.1 percent in November, its best number in 2012, far surpassing economist predictions of a 0.5 percent gain. In October, manufacturing output had declined by 1.0 percent. According to the Fed report, “Nearly all the decline in factory output in October is estimated to have been related to Hurricane Sandy, and the increase in November reflects a post-hurricane rebound in production as well as the solid advance in the output of motor vehicles and parts.”
With the fiscal cliff staring businesses in the face and Hurricane Sandy temporarily crippling the East Coast late in October, manufacturing has been experiencing a slow-down in the second half of 2012, so the better-than-expected November report provides some optimism as the year winds down.
The auto sector got a lift in November with a 4.5 percent increase in production, following a flat month of October and marking the biggest jump since January. Among durable consumer goods categories, the index for automotive products rose 3.4 percent, its first increase in five months.
Output at mines rose 0.8 percent to build upon a 0.3 percent increase in October. Utility production was flat in October, but rose 1.0 percent in November.
At 97.5 percent of its 2007 average, total industrial production in November was 2.5 percent above its year-earlier level.
An earlier report this morning by the Labor Department showed that the cost of living for Americans was lower in November, according to the Consumer Price Index.