U.S. Industrial Production Rises, Driven by Auto Manufacturing Rebound
Manufacturing Output Gains as Motor Vehicle Production Soars Post-Strike
Industrial production in the United States saw a modest increase
of 0.2 percent in November, with a notable rise of 0.3 percent in manufacturing
output, as reported by the Federal Reserve. A significant rebound in motor
vehicle and parts production, which surged by 7.1 percent following the
resolution of trade union strikes at major automakers, primarily contributed to
this upswing.
The overall boost in manufacturing was, however, tempered by a
0.2 percent decline in production excluding motor vehicles and parts. Despite
these gains, the output of utilities dipped by 0.4 percent, while mining output
edged up by 0.3 percent. Compared to the same period last year, total
industrial production was 0.4 percent lower, but capacity utilization in
November experienced a slight increase, reaching 78.8 percent, which is still
0.9 percentage points below the long-term average from 1972 to 2022.
The output across various market groups presented a mixed
picture. The automotive sector's resurgence led to a 7.5 percent hike in the
index for automotive products, significantly impacting consumer durables, which
grew by 3.5 percent. In contrast, the production of consumer nondurable goods
fell by 0.8 percent. Business equipment output rose by 0.9 percent, primarily
due to an increase in transit equipment, while defense and space equipment saw
a 1.2 percent gain. The indexes for construction supplies and business supplies
remained stable compared to October, and a general increase of 0.3 percent in
materials output was buoyed by a 2.7 percent jump in the index for consumer
parts.
Durable manufacturing increases
Delving into industry-specific details, November's manufacturing
output, which was 0.8 percent lower than the previous year, showed a 1.2
percent increase in durable manufacturing and a 0.5 percent decline in
nondurable manufacturing. Within durable manufacturing, alongside the
significant recovery in motor vehicles and parts, there were increases in
computer and electronic products, as well as aerospace and miscellaneous
transportation equipment. On the downside, there were decreases in wood
products and miscellaneous categories. Nondurable manufacturing's only increase
was in printing and support, while other categories like textile and product
mills, and apparel and leather, witnessed significant declines.
Mining output showed a positive trend with a 0.3 percent rise in
November, standing 2.3 percent above its level a year ago. However, the utility
sector's output decreased by 0.4 percent and was 1.0 percent lower than the
previous year. Capacity utilization for manufacturing edged up to 77.2 percent
in November, still below its long-run average, while mining's operating rate
improved, surpassing its long-run average by 7.3 percentage points. In
contrast, the operating rate for utilities declined, remaining well below its
historical average.
