US factory output declined sharply in November
Friday, December 16, 2011
WASHINGTON (AP) — U.S. manufacturing output fell in November for the first time in seven months.
The decline was largely because factories made fewer autos. But production of home electronics, appliances and business equipment also dropped.
Economists took the industrial production report from the Federal Reserve with a little caution. While most agreed it was not good news, many noted that the 0.2 percent decline in output at the nation’s factories, mines and utilities followed steady gains over the previous six months.
And more recent data from regional Fed banks suggests manufacturing grew sharply in both the Northeast and Philadelphia region in December.
“One month is not a trend,” said Dan Greenhaus, chief global strategist with BTIG LLC.
Factory output, the biggest component of industrial production, decreased 0.4 percent. The decline was mainly because of steep drop in the production of motor vehicles and parts. When stripping out auto production, which can be volatile from month to month, factory output fell just 0.2 percent.
Automakers reported strong sales for November. Chrysler, Ford, Nissan and Hyundai showed double-digit gains. The industry’s growth has been a major contributor to recent gains in factory output.
“As long as auto demand is strengthening, the prospects for auto production remain good, and this month’s slump should prove an aberration,” said TD Economics economist Alistair Bentley in a research note.