While the U.S. CPI numbers left economists scratching their heads, they got some cheer from a couple of other shreds of economic data.

U.S. inventories fell a surprisingly steep 1.4% in October, after a revised 0.6% decline in September. CIBC World Markets says this suggests that businesses are making more progress to clearing out surplus stocks.

Also, industrial production fell by only half the 0.6% expected by the market in November, “a sign the long-standing recession in the factory sector may be coming to an end.”

Capacity utilization dropped to an 18-year low of 74.7% in November. “A figure below 75% is always associated with downward inflation pressure, which will be accentuated by the global economic slowdown and the super-strong U.S. dollar,” says BMO Nesbitt Burns.

Royal Bank economists note, “November brings the level of production down 5.9% relative to last November and caps a string of 13 monthly declines in the past 14 months. Areas of strength were evident in traditional industries with the production of motor vehicles and parts up a sharp 6.4% as auto manufacturers adjusted to the surprisingly robust pace of motor vehicle sales and quickly disappearing auto inventories.” It says that lower inventories are setting the stage for a broader upturn in industrial production by next spring.

Techs may remain troubled for some time however. Capacity utilization by U.S. high-tech producers has fallen to a painful 60%, RBC notes. “With demand for most high-tech equipment still soft, it will take a long time for this industry to return higher levels of capacity utilization and profit growth.”

“U.S. manufacturing is still in a widespread slump,” says BMO. “However, as it did in November, the auto sector will support industry in coming months. Auto production will be ramped up to replenish depleted inventories from recent record car sales,” it predicts.