Production Inventories Fall, Consumer Prices Unchanged
December 14, 2001
Industrial production fell in November for the 14th month in a row.
Friday the Federal Reserve reported a 0.3% drop, following a 0.9 drop the month before.
The November production report is consistent with Heavy Duty Trucking
magazine’s economic forecast, which expects the manufacturing recession to last a few more months.
Manufacturing production fell 0.2% from October to November on the strength of a 6.4% gain in auto production needed to refill dealer lots after record October car sales. Energy production fell 1.1% due to low prices shutting down some exploration work and high product inventories slowing refinery production. Total production had declined nearly 1% in each the previous few months.
Excluding energy, non-durable goods production was steady. Excluding auto, durable goods production fell 0.7% from October.
Initial reports for December suggest that the production index will decline modestly again this month. In addition to motor vehicles, computers and chemicals had increased production in November. No sustained pickup is expected until late in the winter.
Meantime the U.S. Commerce Department reported on Friday that business inventories fell 1.4% in October, following a 0.6% drop the month before. It’s hoped the drop will lead to increases in manufacturing, translating into more products being shipped by truck.
Also on Friday, the U.S. Labor Department released figures showing consumer prices were unchanged in November. However, when the volatile food and energy sector are removed from the number, prices increased 0.4%, the largest increase in four years.