US manufacturing output beats November estimates as car factories continue to shine through the pandemic
- US factory output rose more than expected in November, largely buoyed by strong auto manufacturing.
- Manufacturing output climbed 0.8% last month, according to Federal Reserve data. Economists surveyed by Bloomberg expected a 0.4% gain.
- Motor vehicle and part production leaped 5.3% in November, marking the first monthly gain since July. The industry counted for roughly half of overall output growth last month, according to the Fed.
- Manufacturing activity has largely held up better than the service industry as COVID-19 cases climb to record highs and cities re-enter partial lockdowns.
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US factory output gained more than expected in November as auto manufacturing continued to outperform despite rising COVID-19 cases.
Manufacturing output rose 0.8% last month, according to Federal Reserve data published Tuesday. Economists surveyed by Bloomberg expected a 0.4% climb. Industrial production grew 0.4% and now sits roughly 5% below its pre-pandemic highs.
Motor vehicle and part production leaped 5.3% through November, marking its first month of growth since July. Auto manufacturing and sales fueled strong economic growth through the summer before slowing modestly into the fall. The industry counted for roughly half of overall output growth in November.
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Paper and aerospace manufacturing also grew at healthy rates last month. Utilities output slowed as warmer-than-usual temperatures cut into heating demand, according to the Fed.
"The recovery in overall industrial production and manufacturing output specifically have been partial, even though there has been strong growth reported in recent months," Daniel Silver, an economist at JPMorgan, said.
US manufacturing has mostly recovered faster than other pockets of the economy. Factory reopenings in the spring saw production bounce back before growing at a more moderate pace. The steady climb to pre-pandemic strength has been far more encouraging than the service industry's more turbulent pace of recovery.
Factories are also seemingly more insulated from rising COVID-19 cases. The US reported 193,384 new cases on Monday, according to The COVID Tracking Project. The prolonged climb in cases and virus hospitalizations has prompted several state and city governments to reinstate lockdown measures. Such policies have slammed service industries, but the Tuesday Fed data suggest manufacturing is holding up well through the pandemic's latest wave.
Separately, the Federal Reserve Bank of New York's gauge of state manufacturing gained for a sixth-straight month in December, albeit at a slowing pace. The Fed's business conditions index fell to 4.9 from 6.3, landing slightly below economist expectations. Readings above zero reflect sector growth, while negative readings signal contraction.
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