WASHINGTON (AP) — U.S. factories are roaring back from the depths of the recession, cranking out more machinery, vehicles and energy.
Factory production has surged 15 percent above its lows of 2½ years ago and is helping drive the economy's recovery.
A jump in manufacturing output last month coincided with other data suggesting that the economy began 2012 with renewed vigor. Wholesale prices are tame. Demand for U.S. Treasury debt should help keep borrowing costs low. Even homebuilders are more optimistic.
Signs "that manufacturing in the U.S. is gaining global market share appears to be growing, and this could be an important dynamic supporting growth in 2012," said John Ryding of RDQ Economics.
Manufacturing rose 0.9 percent from November to December, the biggest monthly gain since December 2010, the Federal Reserve said Wednesday.
Over the past year, factory output has risen 3.7 percent. Factories benefited in the second half of 2011 from several trends: People bought more cars. Businesses spent more on industrial machinery and computers before a tax incentive expired. And companies restocked their supplies after cutting them last summer.
The growth has also fueled more hiring. Factories added 23,000 jobs in December, the most since July.
Meanwhile, businesses are starting to see some relief from high energy and food prices. The producer price index declined 0.1 percent in December, the Labor Department said.
Also Wednesday, the National Association of Home Builders/Wells Fargo builder sentiment index rose in January for the fourth straight month, to its highest level since June 2007. The reading remained far below levels that suggest they are optimistic about a turnaround.
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