US manufacturing production rises more than expected in November

WASHINGTON: US manufacturing output rebounded more than expected in November, as the end of an almost six-week strike at General Motors plants boosted auto production.

The Federal Reserve said on Tuesday that manufacturing production rose 1.1pc last month after a downwardly revised 0.7pc fall in October. Industrial output also rose 1.1pc in November after a downwardly revised drop of 0.9pc in October.

Excluding motor vehicles and parts, overall industrial production and manufacturing output in November rose 0.5pc and 0.3pc respectively.

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Economists polled by Reuters had forecast overall manufacturing output would rise 0.7% and industrial output would increase 0.8pc in November. Production at factories still fell 0.8pc in November on a year-on-year basis.

The United Auto Workers union reached a new four-year labour contract with General Motors in late October, ending a strike by about 46,000 workers with the No. 1 US automaker.

The Fed’s measure of the industrial sector comprises manufacturing, mining, and electric and gas utilities.

There was a 12.4pc jump in the production of motor vehicles and parts in November. Overall, production rose 2.1pc for consumer goods and 1.7pc for business equipment, the Fed said. Utilities output increased 2.9pc compared to a decline of 2.4pc in the previous month.

The manufacturing sector, which makes up about 11pc of the US economy, has been weakened by a 17-month trade war between the United States and China.

Last Friday, the world’s two largest economies announced a “Phase one” agreement that reduces some US tariffs in exchange for increased Chinese purchases of American farm goods.

With overall industrial output rising, capacity utilization, a measure of how fully firms are using their resources, increased 0.7 percentage point to 77.3pc in November from a downwardly revised 76.6pc in October.

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