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Economy in Brief

U.S. Industrial Production Rebounded in November
by Sandy Batten  December 17, 2019

Industrial production rebounded in November, rising 1.1% m/m (-0.8% y/y) after having fallen a downwardly revised 0.9% m/m in October and 0.4% m/m in September. The Action Economics Forecast Survey had looked for a 0.8% m/m rise. Manufacturing output also rose 1.1% m/m (-0.9% y/y) in November after declines in both October and September with cooler weather boosting utilities output 2.9% m/m (-4.1% y/y) after a 2.4% m/m decline in October. Mining output fell 0.2% m/m (+2.0% y/y) in November for its fourth decline in the past five months.

The November rebound in overall production was led by the revival of motor vehicle production as the strike at General Motors was resolved. Motor vehicle production jumped up 20.2% y/y in November after declines of 9.3% m/m in October and 8.8% m/m in September. But even excluding the rebound in motor vehicle output, other production was stronger in November. Manufacturing output excluding motor vehicles rose 0.3% m/m after having declined 0.3% m/m in both October and September.

Output of final products surged 1.8% m/m after a 0.8% m/m decline in October and a 0.7% m/m drop in September. Consumer goods production rose even more, increasing 2.1% m/m in November, more than offsetting the 0.8% m/m decline in October and the 0.6% m/m drop in September. Business equipment output was also strong, rising 1.7% m/m in November following monthly declines in both October and September. Construction supplies production also rose in November, but only 0.2% m/m, falling far short of offsetting declines in both October and September. Materials production rose 0.7% m/m in November with production of both energy and nonenergy materials rebounding.

In the special aggregate groupings, high-tech production continued to climb, rising 1.7% m/m in November, led by a 2.6% m/m jump in the production of computers and peripheral equipment. Factory output excluding high-tech production rose a solid 1.1% m/m in November while production excluding high-tech and motor vehicles increased a more modest 0.2% m/m but this rise came after declines in both October and September.

The total industry capacity utilization rate increased more than expected to 77.3%, its first increase in three months, from 76.6%. It has been trending down since later 2018. The October reading was the lowest in two years. The factory sector utilization rate also rose in November, to 75.2% from 74.5%, which was the lowest reading since March 2017.

Industrial production and capacity data are included in Haver's USECON database. Additional detail on production and capacity can be found in the IP database. The expectations figures come from the AS1REPNA database.

Industrial Production (SA, % Change) Nov Oct Sep Nov Y/Y 2018 2017 2016
Total Output 1.1 -0.9 -0.4 -0.8 3.9 2.3 -2.0
Manufacturing 1.1 -0.7 -0.7 -0.9 2.3 2.0 -0.8
    Consumer Goods 2.1 -0.8 -0.6 -1.3 2.1 0.5 0.6
    Business Equipment 1.7 -0.8 -1.2 -1.5 3.2 3.6 -5.3
    Construction Supplies 0.2 -0.5 -0.3 0.9 2.8 3.5 0.9
  Materials 0.7 -1.1 -0.3 -0.6 5.9 2.7 -3.0
Utilities 2.9 -2.4 1.4 -4.1 4.4 -0.8 -0.4
Mining -0.2 -0.8 -0.3 2.0 12.4 7.4 -9.9
Capacity Utilization (%) 77.3 76.6 77.4 79.6 78.7 76.5 75.0
  Manufacturing 75.2 74.5 75.1 76.9 76.6 75.1 74.2
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