The nation's industrial output continued to rise strongly last month, although most analysts expect a renewed dip in the economy to come soon.
The Federal Reserve Board yesterday reported a 1.4 increase in industry's output in November, after upward revised rises of 1.8 percent in October and 1.5 percent in September.
However, the recent surge in interest rates -- which continued yesterday as the prime lending rate of major banks jumped to a record 21 percent -- is expected to dampen the economic recovery that has taken place since the summer.
Overall, the nation's factories, utilities and mines have increased their output by a swift 5.8 percent since the low in July. But last month output was still 2.5 percent below the level of a year ago, the Fed reported.
Autos led a 1.5 percent gain in durable-goods production during the month. But the Fed warned that "recently reduced industry schedules indicate a decrease [in auto production] in December."
High interest rates hit the auto and housing industries the hardest in the short recession earlier this year and are likely to damage these industries again in the coming months.
But housing starts have so far been remarkably buoyant. They remained virtually unchanged last month, the Commerce Department reported yesterday. Starts of new, privately owned housing units fell just 0.4 percent from October to a seasonnally adjusted annual rate of 1,555,000.
Mark J. Riedy, executive vice president of the Mortgage Bankers Association of America, commented, "We're surprised by the figures." He had expected them to show a sharp drop as a result of soaring mortgage rates. He and other analysts expect a significant decline in starts to show up next month.
The mild November weather may have contributed to the better-than-expected picture for housing last month.
Auto production during November was up by 3 percent on the previous month, with 6.9 million units assembled at an annual rate last month, the Fed reported.
Output of all consumer goods was up by 0.8 percent in November, after rises of 1.6 percent and 1 percent in October and September, respectively.The 1.5 percent rise in durable consumer goods last month was considerably lower than October's 5.0 percent jump and September's 3.3 percent increase.
Business equipment output rose by 0.9 percent in November, more than in recent months. The Fed said that this category of production is one of the few which is now higher than a year ago.
Construction supplies rose by 2 percent last month -- not showing any signs as yet of a housing slowdown. However, this category of output was still 9.2 percent lower than in November 1979.
November's output gains "were large for most product and material" industries, the Fed said. But there is more doubt about how long the strength will last.
Production in home goods industries rose by 0.8 percent in the month, compared with rises of between 1 percent and 4 percent in the previous three months.
Nondurable consumer items climbed by 0.6 percent in November, slightly more than in earlier months. The recession in the spring and early summer hit durable-goods industries harder than nondurables.