WASHINGTON (AP) â¿¿ U.S. industrial production likely picked up a bit last month, although factory output probably stayed weak. Many companies remain worried about looming tax increases and may have further delayed purchases of machinery and equipment. Economists forecast that output at the nation's factories, mines and utilities rose 0.3 percent in November from October, according to a survey by FactSet. That would offset most of the 0.4 percent decline in October. The Federal Reserve will release the report at 9:15 a.m. EST Friday. Factory output, the most important component, tumbled 0.9 percent in October. Part of the decline was blamed on Superstorm Sandy, which disrupted some factories in the Northeast. Economists expect the storm had less impact on the November data. Still, many companies have also held off on big purchases since spring because they are worried about the "fiscal cliff". That's the combination of tax increases and spending cuts that are set to take effect in January if President Barack Obama and Republican lawmakers can't reach a budget deal before then. Fears of the fiscal cliff continued to weigh on factory activity in November, other data showed. U.S. manufacturing activity shrank in November to the slowest pace since July 2009, according to a closely watched index of manufacturing activity compiled by the Institute for Supply Management. Economists say the economy is growing in the current October-December quarter at an annual rate below 2 percent. That would be slower than the 2.7 percent growth rate in the July-September quarter and too weak to rapidly lower the unemployment rate. The job market is making steady gains. Employers added 146,000 jobs in November. That's about the same as the average monthly gain of 150,000 in the past year. The unemployment rate fell to 7.7 percent â¿¿ a four-year low â¿¿ from 7.9 percent in October. But the decline occurred mostly because more people without jobs gave up looking for work. The government counts people without jobs as unemployed only if they're actively seeking one.
High unemployment and weak economic growth prompted the Federal Reserve Wednesday to make a major change in its guidance of future interest rate hikes. The Fed said it plans to keep the benchmark short-term interest rate near zero until unemployment falls to at least 6.5 percent, as long as inflation stays low.It was the clearest sign yet that they will keep rates super-low even after unemployment falls further and the economy picks up. The Fed also said it would continue purchasing $85 billion in Treasury bonds and mortgage-backed securities each month in an effort to push down longer-term interest rates.