WASHINGTON (Reuters) – Production at U.S. factories increased in November, lifted by a partial rebound in motor vehicle output following the end of strikes by the United Auto Workers (UAW) union against Detroit’s “Big Three” automakers.
Manufacturing output rose 0.3% last month, the Federal Reserve said on Friday. Data for October was revised lower to show production at factories decreasing 0.8% instead of 0.7% as previously reported. Economists polled by Reuters had forecast factory output rebounding 0.4%.
Manufacturing, which accounts for 11.1% of the economy, continues to be hamstrung by higher borrowing costs. Despite an easing in financial conditions and prospects of interest rate cuts next year, a rapid improvement in factory output is unlikely amid signs that businesses are throttling back on inventory accumulation in anticipation of softer demand.
A survey from the Institute for Supply Management this month found that manufacturers viewed customer inventories as having increased “toward the upper end of ‘about right’ territory” in November. The ISM’s manufacturing PMI has remained in contraction territory for 13 straight months, the longest such stretch since the period from August 2000 to January 2002.
The Federal Reserve held interest rates steady on Wednesday and signaled in new economic projections that the historic tightening of monetary policy engineered over the last two years is at an end and lower borrowing costs are coming in 2024.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
