Industrial production in the U.S. showed signs of recovery as it rose more than expected in November, a report by the U.S. Commerce Department showed.
Industrial production rose 0.4 percent in November, after a decline of 0.2 percent in October. Economists were expecting a rise of 0.3 percent. Total capacity utilization for the industry rose to 75.2 percent during the month.
Motor vehicle output can be volatile from month to month, so we would expect to see a correspondingly strong rebound in December, particularly as November's slump was concentrated in light truck assemblies, Paul Ashworth, an economist at Capital Economics, said.
Factory output rose 0.3 percent in the manufacturing sector. However, the production of motor vehicles and parts dropped substantially during the month. Excluding motor vehicles and parts, overall factory output rose 0.7 percent.
Output of consumer goods fell by 0.5 percent from the previous month, while business equipment and business supplies both rose 0.9 percent in November.
But the weak consumer/strong business investment story is now changing on the expenditure side, with consumption growth showing signs of picking up, while the growth rate of business investment is slowing. Hopefully, we will begin to see this shift showing up in the production data soon too because, otherwise, it implies that all the extra consumption is focused on imported goods, Ashworth said.
In sum, more evidence suggesting that the economy is getting its groove back, although the pace of growth in the industrial sector is still weaker than it was over the first few months of this year, he added.