US Factory Output, Capacity Utilization Increases

An article in the Wall Street Journal (January 15,2011) reports that US factory output rose 0.8 % in December (from November).  Capacity utilization was reported to increase to 76 % from 75.4 % in November and business inventories increased 0.2 % over the previous month but sales increased 1.2 %.  The combination of these supply chain measurements suggests that production may be expected to increase to bring supply and demand in sync.  Do you agree with this assessment ? Or, given that the data also suggests that auto and construction sectors were weaker than others and show production losses, portend a continued grim outlook for manufacturing ?

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