US industrial production falls 0.4% in Nov, vs 0.2% drop expected

A worker helps to build a Victory motorcycle on the assembly line at the Polaris Industries factory in Spirit Lake, Iowa.
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U.S. industrial production fell 0.4 percent in November, a bigger drop than anticipated, due to a steep decline in utility output and a dip in manufacturing, data from the Federal Reserve showed on Wednesday.

The drop was the largest decline in industrial production since March, when the index fell 0.9 percent.

Output for October was revised to show a 0.1 percent increase rather than the unchanged level initially reported. Economists polled by Reuters had forecast industrial production falling 0.2 percent in November.

Manufacturing output fell 0.1 percent in November, less than the 0.2 percent decline anticipated by economists. It rose by an upwardly revised 0.3 percent in October.

Utilities production dropped 4.4 percent in November as warmer-than-normal temperatures reduced demand for heating. Utilities output fell by a downwardly revised 2.8 percent in October.

Mining production, which has been hurt by low oil prices, was up 1.1 percent after a downwardly revised 1.9 percent gain in October.

Industrial capacity utilization declined to 75.0 percent from 75.4 percent in October. Economists had forecast this metric at 75.1 percent. Officials at the Fed tend to look at capacity use as a signal of how much "slack" there is in the economy and how much room there is for growth to accelerate before it becomes inflationary.