U.S. Industrial Production Jumps 1.1% In November, More Than Expected

(RTTNews) - With utilities output jumping sharply amid colder-than-average temperatures, the Federal Reserve released a report on Monday showing that U.S. industrial production rose by much more than expected in the month of November.

The report said industrial production surged up by 1.1 percent in November compared to economist estimates for an increase of about 0.6 percent.

Additionally, the Fed said the data for October was upwardly revised to show a 0.1 percent uptick compared to the originally reported 0.1 percent drop.

The increase in production in November was partly due to a 3.9 percent jump in utilities output, which came on the heels of a 0.3 percent drop in the previous month. The Fed said the colder-than-average temperatures boosted demand for heating.

Mining output also showed a notable rebound, climbing by 1.7 percent in November after falling by 1.5 percent in October.

The report also showed that manufacturing output increased by 0.6 percent in November after rising by a revised 0.5 percent in October. With the increase, manufacturing output rose for the fourth straight month.

Paul Dales, Senior U.S. Economist at Capital Economics, said, "The 0.6% m/m rise in manufacturing output is the best guide to the underlying trend, and it suggests that producers are benefitting from stronger demand both at home and overseas."

"After not rising at all over the summer, output is now increasing at a 3m/3m annualized rate of 3.1%," he added. "Some of the survey evidence (such as the ISM and Markit indices) suggests that growth will soon accelerate further."

The Fed also said capacity utilization climbed to 79.0 percent in November from a revised 78.2 percent in October. Economists had expected capacity utilization to edge up to 78.4 percent.

With the bigger than expected increase, the capacity utilization rate reached its highest level since June of 2008.

Capacity utilization in the utilities sector jumped to 81.0 percent from 78.0 percent, while capacity utilization in the mining and manufacturing sectors rose to 89.7 percent and 76.8 percent, respectively.