Output at the nation’s factories and mines jumped 0.9 percent in November, the strongest gain in a year, driven by a sharp upswing in auto production, the Federal Reserve said Wednesday.
It was the sixth straight monthly increase in industrial production and followed a 0.7 percent October gain. Analysts said it provided further evidence of robust economic growth.
“It basically fits with an economy that is growing rather strongly, at a 4.9 percent annual rate this quarter,” said Elliot Platt, director of economic research at DLJ Securities Inc.
About half the November gain was due to higher motor vehicle and parts production, which has jumped by 20 percent in the last four month as low financing rates encouraged people to replace their aging cars and trucks.
But even when auto manufacturing was excluded, output expanded by a healthy 0.5 percent in November.
The strong gains meant that American factories were working harder and faster in November, using 83 percent of their productive capacity, the Fed said.
This pushed capacity utilization to its highest level since August 1989, when it stood at 83.2 percent. The November rate was up 0.6 percent from the prior month and compared with a 80.8 percent level in November a year ago.
Analysts said it probably is too soon to worry about inflationary pressures from facilities working near capacity.
“If your factory is at capacity, you can just pick up the phone and call China and order more widgets from there,” said Sam Kahan, economist at Fuji Securities Inc.
In another report, the Commerce Department said business inventories were unchanged in October, failing to increase for the first time in three months. Sales, on the other hand, rose 0.4 percent.
Stocks held on shelves and backlots totaled a seasonally adjusted $867.6 billion. Inventories had risen 0.2 percent in September and 0.3 percent in August, after falling 0.1 percent in July.
Business sales totaled a seasonally adjusted $598.3 billion, up for the sixth time in seven months.
