- Paul Krugman, Nobel Prize winning economist
Industrial production in the world's number one economy rose in November as factories increased output of cars, machinery, clothing and other goods, a sign of surging demand for American products amid falling oil prices. Industrial production, which measures the output of US manufacturers, utilities and mines, soared a seasonally adjusted 1.3% from the previous month, according to the Fed. That followed a gain of 0.1% in October, revised up from the earlier reported 0.1% decline. Capacity utilization, an indicator of slack in the industrial sector, rose to 80.1% in November, the highest rate since March 2008 and compared with October's revised reading of 79.3%. Overall industrial output in November increased 5.2% from a year earlier. Meanwhile, Empire State manufacturing Index surprised markets to the downside, as business activity came in against expectations and surprisingly declined for New York manufacturers for the first time in nearly two years. The headline general business conditions index slid to -3.6, compared with 10.16 reported last month, and considerably below economists' forecast of 12.0. An index reading above 0 points shows activity is generally growing; while below 0, that it is falling. The distance from 0 is indicative of the strength of the expansion or decline. The drop may be a sign that the state's factories are suffering from slower overseas demand as Europe's economy is struggling to grow.
© Dukascopy Bank SA