Production gain shows U.S. factories will spur growth
FACTORY PRODUCTION increased 0.6 percent in November, following a 0.5 percent gain in October, in the United States, as U.S. manufacturers built momentum that seems likely to affect the Federal Reserves decision as to when to end its bond-buying program that has been helping the economy weather the effects of the Great Recession. Here, Boeing employees work in the cargo bay of a Boeing Co. C-17 Globemaster III military cargo jet being built in Long Beach, Calif.
BLOOMBERG NEWS PHOTO/PATRICK T. FALLON
By Victoria Stilwell Bloomberg News
WASHINGTON - American assembly lines churned out more cars, electronics and furniture in November, showing manufacturing will help the world’s largest economy strengthen in 2014.
Factory production climbed 0.6 percent last month following a 0.5 percent gain in October that was larger than previously estimated, according to figures from the Federal Reserve issued Monday in Washington. Total industrial output jumped 1.1 percent, the most in a year and propelled by a rebound in utility use as temperatures dropped.
Manufacturing “is accelerating pretty significantly,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., and the top-ranked production forecaster over the past two years, according to data compiled by Bloomberg. “It’s one of the reasons growth looks like it’s accelerating going into 2014.”
Improving household spending and global sales will probably keep factory floors busy, benefiting companies such as Ford Motor Co. Fed policy makers meeting this week are trying to gauge how much progress the economy has made in order to determine whether it’s time to trim monthly bond purchases.
The Standard & Poor’s 500 index rose 0.6 percent to 1,786.2 at 12:21 p.m. in New York as investors tried to figure out how the data would affect monetary policy before the Fed’s two-day meeting that starts Tuesday.
Economists surveyed by Bloomberg are divided over when the central bank begins tapering, with 34 percent saying this month and 40 percent saying it will wait until March, according to results of a poll taken Dec. 6.
Manufacturing is also picking up in Europe. Euro-area factory output grew this month at a faster pace than economists forecast, led by Germany, as the currency bloc continued its gradual recovery from a record-long recession. An index based on a survey of purchasing managers climbed to a 31-month high, figures from London-based Markit Economics said Monday.