Industrial production in the United States saw a 1.1 percent bump in November, close to the 1.2 percent that Wall Street had been expecting. But while this is certainly the biggest gain the Federal Reserve has noted in more than two years, production is still down 0.8 percent.
Now a big part of the bump in the manufacturing sector resulting from a 12.4 percent gain in car, truck, and automobile parts production. This, of course, is quite the rebound, coming out of the United Auto Workers strike against General Motors. In October, the UAW union finally managed to reach a new four-year labor contract with General Motors, bringing an end to a strike that kept 46,000 workers from employment with the top automaker in the United States.
When we exclude these numbers, though, total industrial output was only up about 0.5 percent, with manufacturing up 0.3 percent.
Utility output was also up 2.9 percent in November but mining production slipped 0.2 percent.
Last week’s biggest jump was in capacity utilization, which saw a boost of more than 77 percent in November. That is a 0.7percent jump from the month before, which was revised down to 76.6 percent. If you were not aware, capacity realization is a term used to describe the limits of operating the country’s factories, mines, and utilities. The increase is certainly impressive but still below pre-recession levels of 80 percent. And this factor could stoke production costs, which will lead to higher prices.
It might also be worth noting that many economists agree the GM strike is extra static amid a sea of much deeper issues. The factory sector, after all, continues to struggle as business pull back on investment strategies in the face of shrinking global trade flow. That said, the same economists (and probably others as well) believe the factory setting may be stabilizing.