Industrial production climbed in November by the most in a year, a sign manufacturing is bolstering the world’s biggest economy.
Output at factories, mines and utilities rose 1.1% after a revised 0.1% gain in October that was previously reported as a decline, a report from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey called for a 0.6% increase. The index of industrial production rose to 101.3, exceeding for the first time its pre- recession peak in December 2007.
Manufacturing rose by the most in three months, indicating factories are getting a boost from a rebound in domestic demand and pickups in some overseas markets such as Europe and China. Sustained gains in the labor market will help propel consumer spending further, supporting the industry into 2014.
“It’s pretty clear that consumption is accelerating in the fourth quarter,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said before the report. “Manufacturing, in general, looks pretty good.”
Estimates of the 81 economists surveyed by Bloomberg ranged from production increases of 0.2% to 1.2% after a previously reported 0.1% decline in October.
Treasury securities maintained gains after the report, with the yield on the benchmark 10-year Treasury note falling to 2.84% at 9:17 a.m. in New York from 2.87% late on Dec. 13.
Manufacturing, which makes up 75% of total production, advanced 0.6% last month after rising a revised 0.5% in October. The back-to-back increases were the strongest this year. Factories churned out more consumer goods, materials and construction supplies last month.
Utility output increased 3.9% after declining 0.3% in October. Falling temperatures prompted Americans to adjust their thermostats last month, the Fed said.
The average U.S. temperature during November was 41.6 degrees Fahrenheit (5.3 degrees Celsius), compared with 53.6 degrees in October, according to the National Climactic Data Center. Temperature-related energy demand in the contiguous U.S. during the month was 30% above average, according to an index from the National Oceanic and Atmospheric Administration.
Mining output, which includes oil drilling, increased 1.7%, the most since October 2011, today’s Fed report showed.
The production of motor vehicles and parts increased 3.4% after falling 1.3% a month earlier, today’s report showed. Auto assemblies climbed in November to an 11.6 million annual rate, the fastest since June 2006. Excluding autos and parts, manufacturing rose 0.5%.