US manufacturing output surges in November

US manufacturing output recorded its largest increase in nine months in November as production expanded across the board, pointing to underlying strength in the economy.

Factory production increased 1.1 per cent last month after an upwardly revised 0.4 per cent advance in October, the Federal Reserve said on Monday.

Economists polled by Reuters had forecast manufacturing output rising by only 0.5 per cent in November after a previously reported 0.2 per cent gain in October.

Mining output slipped 0.1 per cent last month, while utilities production jumped 5.1 per cent as a cold snap boosted demand for utilities.

The gain in manufacturing and utilities combined to lift overall industrial production by 1.3 per cent in November, the largest gain since May 2010. October’s industrial output was revised to show a 0.1 per cent increase instead of the previously reported 0.1 per cent dip.

The amount of manufacturing capacity in use rose to 78.4 per cent last month from 77.6 per cent in October.

Overall industrial capacity use increased to 80.1 percent, the highest since March 2008, from 79.3 per cent in October.

Officials at the Fed tend to look at capacity use as a signal of how much “slack” remains in the economy and how much room there is for growth to run before it becomes inflationary.

Reuters