U.S. industrial production rose more than expected in November, posting the sharpest increase in almost two years, as production of cars, equipment, and appliances rebounded from the disruptions of superstorm Sandy, the government reported Friday. The Federal Reserve (Fed) said industrial output from the country's factories, utilities, and mines rose 1.1 percent last month following a 0.7 percent drop the previous month, which was blamed on the storm that slammed the U.S. east coast. The November gain was the biggest since December 2010. Manufacturing, the biggest component in the industrial-production report, rose 1.1 percent last month after falling 1 percent in October. Auto production jumped 4.5 percent to lead widespread increases in factory output. It was the first increase in production at auto plants since July. Production of primary metals, wood products, electrical equipment, and appliances all gained. Production at utilities rose 1 percent in November, while mining output increased 0.8 percent. Capacity utilization, a measure of how fully companies are using their resources, rose to 78.4 percent last month from 77.7 percent in October. Economists expected a smaller gain. The increase in manufacturing is a hopeful sign that business have not yet panicked about the fiscal cliff—the combination of tax increases and government spending cuts that are set to take effect in three weeks if the White House and Republican lawmakers cannot reach a budget deal before then. Still, many firms have delayed purchases of machinery and equipment this year because of uncertainty surrounding taxes and government spending. U.S. manufacturing activity contracted in November to the slowest pace since mid-2009, according to a private-sector index.
