U.S. industrial production drastically increased in December, following three consecutive monthly decreases.
The Federal Reserve’s latest Industrial Production and Capacity Utilization report, issued on Jan. 17, showed production increased 0.9% in December month-to-month, exceeding all forecasts of economists polled by major news outlets. Production fell 0.1% in November.
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At 103.2% of its 2017 average, total industrial production increased 0.5% year-over-year. Capacity utilization moved up to 77.6%, which is 2.1-percentage-points below its long-run (1972-2023) average.
Total December production was impacted by an increase of 0.6% in manufacturing that was boosted by a 1.8% and 2.1% increase in mining and utilities, respectively.
Additionally, the gains in the output of aircraft and parts contributed 0.2-percentage-points to total growth following the resolution of the Boeing strikes.
United States Total Industrial Production Index – Month-Over-Month
source: tradingeconomics.com
Market Groups
The majority of market groups saw gains in December. The index for consumer goods increased 0.5%, as an increase in nondurables production offset a broad-based decline in durables. Nondurable goods increased 0.7%, supported by a gain of 1.9% in the index for energy.
Business equipment showed a positive gain with a 1.4% increase in December, driven by the increase in production of civilian aircraft.
Industry Groups
Manufacturing output increased 0.6% in December month-to-month and was equal to its year-earlier-level. Nondurable manufacturing saw an increase of 0.7%, with gains in all its subcomponents. Similarly, the index for other manufacturing (publishing and logging) increased 0.8%.
Specific industrial groups such as aerospace and miscellaneous transportation equipment (+6.3%) and primary metals (+1.7%) saw increases in the month of December.
Mining output increased 1.8% in December month-to-month, and utilities likewise increased 2.1%, supported by a gain in natural gas utilities (+6.2%).
Capacity utilization for manufacturing ticked up 0.4-percentage-point in December to 76.6%.
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