US industrial production unexpectedly shrunk in November, marking the third consecutive month of decline. A sharp drop in utilities production, likely due to milder weather, contributed significantly to the contraction. While the manufacturing sector showed a slight increase, analysts warn of underlying weakness.
WASHINGTON, D.C. — US industrial production continued to contract last month, the Federal Reserve (Fed) said on Tuesday, announcing a surprise slump and extending the decline for a third consecutive month.Industrial output fell by 0.1 percent in November after declining in both September and October, the Fed said in a statement.The November contraction defied market expectations of a 0.3-percent rise, according to Briefing.com.
A 'sharp decline in utilities production' was responsible for a large part of the November decline, Pantheon Macroeconomics chief US economist Samuel Tombs wrote in a note to clients.This reversed a jump in the data a month prior, 'likely due to unusually warm weather lifting demand for air-conditioning,' he added.The indices for final products rose, while those of nonindustrial supplies and materials fell.Among the major industry groups, the index for manufacturing rose overall, but the indices for mining and utilities both fell.However, the slight rise in manufacturing masks the fact that the sector is 'limping' into the home stretch of 2024, Tombs said, adding that the recent weakness in manufacturing is partly down to a strike at US aerospace manufacturer Boeing. There was a sharp 2.6-percent decline in aerospace and miscellaneous transportation equipment, 'despite the resolution of a work stoppage at a major civilian aircraft manufacturer early in November,' the Fed said following the Boeing strike.This, it added, was 'largely because of declines in the manufacturing of aircraft parts.'
Industrial Production Federal Reserve Manufacturing Utilities Boeing Strike
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