Despite Increases In Mining, Overall Industrial Production Down On Decline In Utility Demand
On Wednesday, the Federal Reserve said that US industrial output fell 0.4 percent in November, the first drop in three months. Factory output slipped 0.1 percent, utilities fell 4.4 percent, and mining production rose 1.1 percent. Media reports attributed the decline in large part to reduced output at power plants, in one instance characterizing the Fed’s report as showing a continued “flat to positive” trend for manufacturers. According to the AP, the decline was “another sign that American industry is struggling even as the overall U.S. economy looks healthy.” The article adds that November’s decline “was steeper than economists had expected.” Bloomberg News says the report showed “an anemic recovery in manufacturing after an extended slowdown.” Bloomberg adds that while factory customers “have made progress trimming bloated inventories and consumer spending is holding up, a recent spike in the value of the dollar represents a new challenge for the nation’s producers.”
What This Means For Small Businesses
The Wall Street Journal reports that economists track industrial production as a measure of the economy’s health. The article notes that increases in output suggest consumers and businesses are spending more and economic activity is increasing. The Federal Reserve’s report sent mixed signals about the economy, since manufacturing output, production of long-lasting durable goods, and utility output fell, while the mining sector showed signs of stabilization. As a good sign for small businesses, economists are still predicting economic growth this quarter, according to the Journal.
Additional Reading
Reuters, the AFP, and MarketWatch also provide coverage.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
