Originally created 12/15/01

Factory turnout tumbles



WASHINGTON - The nation's first recession in a decade rippled further through the economy in November, pushing the operating rate in U.S. industry down to the lowest level in 18 years.

But on the positive side, the economic weakness kept the lid on inflation with the Consumer Price Index showing no change last month as another big drop in energy prices helped offset higher costs for new cars.

A third report showed that businesses worked down their backlog of unsold goods at a record rate in October, a development that analysts said should set the stage for an economic rebound early next year.

Analysts said that, taken together, the various statistics depicted an economy that might be emerging from a recession that officially began last March but had been battering the nation's manufacturing industries for nearly a year before that.

The Federal Reserve reported that output at the country's factories, mines and utilities tumbled 0.3 percent last month, the 13th drop in the past 14 months. But the decrease last month was far smaller than the 0.9 percent plunge in October, reflecting a big jump in auto output.

"Manufacturing remains in recession, but you have to stop falling before you can begin rising, and maybe the decline has started to decelerate," said Joel Naroff, the head of a Pennsylvania consulting firm.

The string of declines in industry output pushed the operating rate at the nation's factories, mines and utilities down to 74.7 percent in November, the weakest pace since May 1983, when the country was climbing out of its worst recession since the Great Depression.

A separate report showed that businesses were able to reduce their backlog of unsold inventories by a record 1.4 percent in October.