WASHINGTON – the U.S. industrial production dropped sharply in November, mainly because power plants reduced production as a result of unusually warm weather.
The Federal Reserve reported Wednesday that output at America’s factories, mines and utilities fell 0.4 percent in the last month. It was a sign that the American industry has the difficult, even if the total U.S. economy looks healthy. The Federal Reserve is confident enough to consider an interest rate hike later in the day.
Utility output dropped 4.4 percent, after a 2.8 percent decline in October. A warm fall meant Americans used less heat.
Factory output slid 0.1 percent. A decrease of car production, which is volatile month to month, offset increased production elsewhere.
Mining production increased 1.1 percent, despite a sharp decline in output in the coal mines.
“Beyond the disappointing headline, the general improving trend in the mining industry and the production needs to justify this afternoon’s broadly anticipated Fed move,” Jennifer Lee, senior economist at BMO Capital Markets, said in a research note.
Still, the industrial production is now dropped three of the last four months and is down from 0.6 percent in the past year. November, the decrease was stronger than economists had expected.
The american industry has been hurt by a strong dollar, making AMERICAN goods more expensive in foreign markets. The factory production is up only 0.1 percent over the past year.
Energy companies have slashed production in the face of low oil prices. That is the reason why mining output down 4.6 percent since November 2015, despite the increase in the last month.
The mines have shed 87,000 jobs over the past year, and factories have lost 54,000.