Partly reflecting a continued increase in manufacturing output, the Federal Reserve released a report on Tuesday showing U.S. industrial production rose by slightly more than expected in the month of November.
The report said industrial production climbed by 0.4 percent in November following a downwardly revised 0.9 percent advance in October.
Economists had expected industrial production to rise by 0.3 percent compared to the 1.1 percent jump originally reported for the previous month.
The Fed said manufacturing output increased for the seventh straight month, advancing by 0.8 percent in November amid a 5.3 percent spike in motor vehicles and parts production.
“The solid 0.8% increase in manufacturing output last month underlines that, regardless of the virus situation, production is continuing to catch up with the recovery in consumption,” Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “With firms starting to rebuild lean inventories over recent months, we suspect production will continue to rise, even as consumption drops back in the face of new virus restrictions over the coming months.”
The report also showed a substantial rebound in mining output, which surged up by 2.3 percent in November after falling by 0.7 percent in October.
On the other hand, utilities output plunged by 4.3 percent in November after jumping by 1.8 percent in October, as warmer than usual temperatures reduced the demand for heating.
The Fed noted that industrial production has rebounded to about 5 percent below its pre-pandemic levels after having plummeted by 16.5 percent between February and April.
Capacity utilization for the industrial sector increased to 73.3 percent in November from a revised 73.0 percent in October.
Economists had expected capacity utilization to inch up to 72.9 percent from the 72.8 percent originally reported for the previous month.
The report said capacity utilization in the manufacturing and mining sectors rose to 72.6 percent and 79.4 percent, respectively, while capacity utilization in the utilities sector slid to 70.2 percent.