By Sharon Nunn and Eric Morath 
 

WASHINGTON--U.S. industrial output rose starkly in November, driven largely by cold weather-induced utility usage.

Industrial production, a measure of factory, mining and utility output, rose a seasonally adjusted 0.6% in November from the prior month, the Federal Reserve said Friday. Economists surveyed by The Wall Street Journal had expected a smaller 0.3% gain for November.

From a year earlier, industrial production increased 3.9% in November.

Output at U.S. factories, which accounts for about 75% of the nation's total industrial production, was flat in November. Mining output grew 1.7%, and utility production surged 3.3% from October. Utility output is typically driven by weather patterns; November's average temperature was in the coolest third of the historical record, according to the National Oceanic and Atmospheric Administration.

Factory production was flat last month because growth in durable goods output was offset by declines in nondurable production, with most major categories, such as food and petroleum, posting declines in November.

Revised figures showed manufacturing output fell in October after increasing the prior four months.

Manufacturing production had been mostly growing since mid-2016, when rising oil prices helped reverse a hit to U.S. energy production. Earlier this year, it appeared that low unemployment rate and the tax cuts passed in late-2017 helped spur demand for U.S.-made products too, via business investment and larger paychecks for Americans. The government also ramped up its defense spending this year, buying more manufactured goods.

Weaker readings in recent months could suggest that global trade tensions and a strong U.S. dollar is slowing U.S. factory output.

Many analysts think the manufacturing sector may have peaked for this economic cycle because of rising interest rates and an unsteady trade environment. The weakening economic outlook in some of the world's largest economies could also slow demand for U.S.-made goods.

Friday's report showed overall capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, grew by 0.4 percentage point to 78.5% in November. Economists had expected 78.6%.

Despite the increase, capacity utilization remains 1.3 percentage points below its long-run average from 1972 to 2017.

The Federal Reserve's latest report on industrial production and capacity utilization can be accessed at: https://www.federalreserve.gov/releases/g17/Current/

Write to Sharon Nunn at sharon.nunn@wsj.com and Eric Morath at eric.morath@wsj.com.

(END) Dow Jones Newswires

December 14, 2018 09:30 ET (14:30 GMT)