WASHINGTON – U.S. industrial production rose slowly in November, with the increase entirely due to a post-hurricane recovery in oil and gas extraction.
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Industrial production -- a measure of output at factories, mines and utilities -- rose a seasonally adjusted 0.2% in November from the prior month, the Federal Reserve said Friday. This was slightly below the 0.3% rise forecast by economists.
October industrial production was revised up to a 1.2% gain from an initial estimate of a 0.9% increase. From a year earlier, industrial production rose 3.4% in November.
"With the disruption from the hurricanes now well behind us, activity remains on course for a solid rebound in the fourth quarter as a whole," said Andrew Hunter, economist at Capital Economics, in a note to clients.
Friday's report showed output in the volatile mining sector jumped 2.0% in November, aided by a gain in oil and gas extraction that the Fed said "returned to normal levels after being held down in October by Hurricane Nate." Without this rebound, industrial production would have remained flat last month, the Fed noted.
Manufacturing output, the biggest component of industrial production, rose 0.2% in November, a sharp slowdown from October's 1.4% increase.
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"Following such a large (October) gain, it was almost inevitable that manufacturing output growth would slow in November," Mr. Hunter said. "With global growth strong and the weaker dollar still supporting exports, the prospects for manufacturing activity still look bright."
Capacity utilization, a measure of slack in the industrial economy, increased 0.1 percentage point to 77.1% in November. Economists had expected capacity utilization of 77.2% in November.
U.S. manufacturing activity has picked up steam this year because of a weaker dollar, more-stable oil prices and global economic growth.
The Institute for Supply Management said its closely watched index of U.S. manufacturing activity remained solidly in a growth mode in November.
Industrial production was knocked off course in recent months, as hurricanes that battered the southern and eastern U.S. in the late summer caused refineries and plants on the Gulf Coast to shut down and stall other keys parts of the manufacturing process. Manufacturing production bounced back in October, the Fed earlier reported, and now energy extraction has returned to normal.
Utility output declined 1.9% in November from the prior month, possibly reflecting lower heating demand as a result of warmer-than-average temperatures.
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Corrections & Amplifications
This item was corrected at 2:46 p.m. ET. The original headline incorrectly stated that industrial production rose 2% in November. It rose 0.2% in November.
U.S. industrial production rose 0.2% in November. "U.S. Industrial Production Rose 2% in November -- Update," at 11:36 a.m. EST, incorrectly stated it rose 2% in the headline. (Dec. 15, 2017)
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December 15, 2017 14:59 ET (19:59 GMT)