WASHINGTON - U.S. factories rebounded in November from Superstorm Sandy, boosting production of cars, equipment and appliances. But after factoring out the impact from the storm, the broader trend in manufacturing remained weak.
The Federal Reserve said Friday that factory output increased 1.1 per cent in November from October. That offset a 1 per cent decline in the previous, which was blamed on the storm.
Auto production jumped 4.5 per cent last month, the first increase since July. Production of primary metals, wood products, electrical equipment and appliances all showed gains.
Total industrial output at factories, mines and utilities rose also rose 1.1 per cent last month, after a 0.7 per cent decline in October.
Still, economists cautioned that the rebound in manufacturing was almost entirely related to Sandy.
Sal Guatieri, senior economist at BMO Capital Markets, noted that when averaging data over October and November, industrial output and manufacturing both were up just 2.1 per cent over the past year — less than half the growth rate from the start of the year.
"Looking beyond Sandy's impact, U.S. manufacturers continue to plod ahead," Guatieri said.
Many companies have delayed purchases of machinery and equipment this year because of uncertainty surrounding taxes and government spending. They are also worried about a slowdown in global growth that has weighed on U.S. exports.
"The global slowdown will prevent a strong recovery" in manufacturing, predicted Paul Dales, senior economist at Capital Economics.
U.S. manufacturing activity shrank in November to the slowest pace since July 2009, according to a closely watched index of manufacturing activity compiled by the Institute for Supply Management.
China's manufacturing activity rose to a 14-month high in December, adding to signs the world's second-largest economy is recovering, a survey showed Friday. But export orders weakened.
Economists say the U.S. economy is growing in the current October-December quarter at an annual rate below 2 per cent. That would be slower than the 2.7 per cent growth rate in the July-September quarter and too weak to rapidly lower the unemployment rate.
The job market is making steady gains. Employers added 146,000 jobs in November. That's about the same as the average monthly gain of 150,000 in the past year.
The unemployment rate fell to 7.7 per cent — a four-year low — from 7.9 per cent in October. But the decline occurred mostly because more people without jobs gave up looking for work. The government counts people without jobs as unemployed only if they're actively seeking one.