FILE - In this Wednesday, Dec. 12, 2012 file photo, Federal Reserve Chairman Ben Bernanke speaks during a news conference at the Federal Reserve Board in Washington. Federal Reserve policymakers expressed broad support in December 2012 for the Fed's plan to buy bonds to support the U.S. economy. But they differed over how long to keep buying bonds to drive down long-term interest rates. Minutes of the Fed's December policy meeting show that some of the 12 voting members thought the bond purchases would be warranted through the end of 2013. (AP Photo/Manuel Balce Ceneta, File)
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FILE - In this Wednesday, Dec. 12, 2012 file photo, Federal Reserve Chairman Ben Bernanke speaks during a news conference at the Federal Reserve Board in Washington. Federal Reserve policymakers expressed broad support in December 2012 for the Fed's plan to buy bonds to support the U.S. economy. But they differed over how long to keep buying bonds to drive down long-term interest rates. Minutes of the Fed's December policy meeting show that some of the 12 voting members thought the bond purchases would be warranted through the end of 2013. (AP Photo/Manuel Balce Ceneta, File)
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FILE - In this Monday, Dec. 10, 2012, file photo, fog obscures the Capitol dome on Capitol Hill in Washington. Even if Congress and the White House fail to strike a budget deal by New Year's Day, reality may be a lot less bleak then the scenario that's been spooking employers and investors and slowing the U.S. Economy. The tax increases and spending cuts could be retroactively repealed after Jan. (AP Photo/J. Scott Applewhite, File)
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The U.S. Capitol in Washington is seen at dawn, Wednesday, Dec. 12, 2012. Leading lawmakers have expressed pessimism that a deal to avert the "fiscal cliff" is close, despite increasing anxiety about a Dec. 31 deadline to stop the expiration of Bush-era tax cuts and separate across-the-board spending cuts that are the result of Washington's failure to complete a deficit-reduction (AP Photo/J. Scott Applewhite)
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Sales Associate Lucas Goller cleans appliances on display at Orville's Home Appliances store in Amherst, N.Y., Thursday, Oct. 25, 2012. U.S. companies in October increased their orders of machinery and equipment that signal investment plans by the largest amount in five months, a hopeful sign for future economic growth. (AP Photo/David Duprey)
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In this Thursday, Oct. 25, 2012, photo, Mary Ann Rotolo shops for a microwave oven at Orville's Home Appliances store in Amherst, N.Y. U.S. companies in October increased their orders of machinery and equipment that signal investment plans by the largest amount in five months, a hopeful sign for future economic growth. Orders for core capital goods, considered a proxy for business investment, rose 1.7 percent in October, the best showing since a 2.3 percent rise in May, the Commerce Department said Tuesday. Orders in this category had slowed (AP Photo/David Duprey)
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FILE - In this Monday, Oct. 15, 2012 file photo, Gloria Bambrick counts and stacks T-shirt components at FesslerUSA apparel manufacture in Orwigsburg, Pa. Superstorm Sandy depressed U.S. industrial output in October, while production of machinery and equipment declined sharply, reflecting a more cautious outlook among businesses, according to Federal Reserve reports, Friday, Nov. 16, 2012. (AP Photo/Matt Rourke, File)
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FILE - In this Monday, Oct. 15, 2012 file photo, Judy Dross, left, and Gloria Bambrick count and stack components of T-shirts at FesslerUSA apparel manufacture in Orwigsburg, Pa. Superstorm Sandy depressed U.S. industrial output in October, while production of machinery and equipment declined sharply, reflecting a more cautious outlook among businesses, according to Federal Reserve reports, Friday, Nov. 16, 2012. (AP Photo/Matt Rourke, File)
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FILE - In this Friday, June 3, 2011 file photo, President Barack Obama tours Chrysler Group’s Toledo Supplier Park in Toledo, Ohio. The economy President Obama will face over the next four years remains slow and at risk, but signs suggest that the next four years will coincide with a vastly healthier economy than the previous four, which overlapped the Great Recession. (AP Photo/Charles Dharapak, File)
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FILE - In this Oct. 24, 2012, file photo, President Barack Obama speaks at a campaign event at City Park in Denver. The economy President Obama will face over the next four years remains slow and at risk, but signs suggest that the next four years will coincide with a vastly healthier economy than the previous four, which overlapped the Great Recession. (AP Photo/Pablo Martinez Monsivais, File)
US factory output rises for 2nd straight month
WASHINGTON (
AP) — U.S. factory production rose in December for the second straight month, buoyed by more output of autos, electronics and business equipment.
The Federal Reserve said Wednesday that factory output increased 0.8 percent last month compared with November. That followed a 1.3 percent rise in November, which partly reflected a rebound from Superstorm Sandy.
Total industrial production increased 0.3 percent in December from November. That followed a 1 percent rise in November. Production slowed last month mostly because utility output dropped 4.8 percent, reflecting unseasonably warm weather.
Factory output is the most important component of industrial production. The back-to-back gains offered some hope that manufacturing could be picking up after struggling through most of 2012. But economists said any rebound would likely be modest.
Paul Ashworth, chief U.S. economist at Capital Economics, said that the December report showed that manufacturing was "just about keeping its head above water." Other analysts said they expected slow output gains in 2013.
"While the risk of an actual contraction in U.S. manufacturing output has diminished, the economic and policy climate in the U.S. and throughout the world suggest that slow growth for U.S. factories remains the most likely path for 2013," said Cliff Waldman, senior economist for the Manufacturers Alliance for Productivity and Innovation.
Many factories have been hurt by a slowdown in consumer spending and weaker global growth that has dampened demand for U.S. exports.
One exception has been U.S. auto companies, which boosted production sharply last year to meet the best sales since 2007. December was no different: Production of autos and motor vehicle parts rose 2.6 percent. And analysts are forecasting that Americans will buy even more cars and trucks in 2013.
There have been a few other encouraging signs that factories may be recovering from their slump.
The Institute for Supply Management's closely watched index of manufacturing activity rose to a level that signaled growth in December. And manufacturers added 25,000 jobs last month — the best hiring spree for the sector since May.
Economists believe manufacturing could also get a boost from stronger business investment, provided that Congress raises the federal borrowing limit without a fight that damages business confidence. Companies are sitting on large amounts of cash. Analysts believe many are poised to start spending this year on computers, machinery and equipment to expand and modernize their operations.
The overall economy grew at an annual rate of 3.1 percent in the July-September quarter. But analysts believe activity slowed considerably in the October-December quarter to a rate below 2 percent or less, in part because companies cut back on restocking.
Less restocking leads to slower factory production, which weighs on economic growth.
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