Industrial production picked up a little last month, but the 0.5 per cent rise in the output of the nation's factories, mines and utilities was less than some administration economists had hoped for.
The Federal Reserve Board said, except for automobiles, there were widespread increases in production of goods and materials during November.
Economists watch industrial production carefully because increasing output usually translates quickly into jobs, as factories and mines either hire new workers or recall employees that have been laid-off.
Employers added 310,000 persons to their payrolls in November, according to the Labor Department. Administration economists said that such a healthy hiring figure should have resulted from bigger production gains than the Federal Reserve reported yesterday.
Overall industrial output was held down by a 4 per cent falloff in automobile production, the Federal Reserve Board said. Part of the automobile slump was caused by "brief strikes," the Fed said. The agency also noted that the slowdown in car sales in November has caused the auto industry to reduce its assembly schedules for December.
But industrial production was buoyed by a continuing large, near record output of coal in anticipation of the Dec. 6 coal strike.
The coal strike will likely depress coal output figures in next month's industrial production report, but is not expected to have much impact on output in other industrial areas because factories and utilities have stockpiled large quantities of the fossil fuel.
Largely because of the decline in production of cars, overall output of consumer goods fell 0.1 per cent. Production of durable consumer products, such as cars and appliances, fell 1.3 per cent, but output of nondurable consumer products, such as clothing, rose 0.5 per cent.
The central bank reported that production of business equipment rose 0.3 per cent in November, the same as in October. "There were substantial gains in output of both manufacturing and commerical equipment, but production of transit equipment declined," the Fed said.
Production of materials such as coal and other energy-related products rose. Steel production declined for the third consecutive month, although some domestic steel producers said recently they foresee some increases in orders for the first three months of next year.
The Federal Reserve said its index of industrial production was at 139.7 per cent of its 1967 average. That is 6.2 per cent more than a year ago.
An administration economist said the 0.5 per cent rise in production seems low and not consistent with relatively large recent increases in consumer spending and business investment. He said that it may mean there was a marked slowdown in the rate at which business added to their inventories in November.
If business investment and consumer spending continue at their current pace, he said, inventory accumulation will also pick up and industrial output will accerlerate.
The economy needs steady increases in production to bring down the unemployment rate from the 7 per cent plateau to which it has clung since last April. Unemployment was 6.9 per cent last month.