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U.S. Industrial Production Inches Upward in December

A long spell of unseasonably cold weather pushed industrial production up 0.6% in December. This is slightly off from November, when industrial production showed a 0.9% uptick.

The latest U.S. industrial production report indicates the slight uptick was primarily due to an increase of 5.9% in electric and gas utilities thanks to unseasonably cold weather. By comparison, last month's report showed broad-based increases in both durable and non-durable goods categories.

In the month of December, the production of consumer goods moved up 0.6% in December, as a large increase in residential sales by utilities boosted the index for consumer energy goods. Elsewhere, the output of consumer durables fell 0.9%, and the output of consumer non-energy nondurables was unchanged.

Among durables, decreases in the indices for automotive products and for appliances, furniture, and carpeting more than offset an increase in the index for home electronics. Among non-energy nondurables, the output of chemical products rose 0.9%, but the output of paper products fell 1.7%; production for other major categories decreased slightly. For the fourth quarter as a whole, the overall index for consumer goods increased at an annual rate of 8%.

Capacity utilization for manufacturing was 68.6%, a rate 11 percentage points below its average for the period from 1972 to 2008. The production of durable goods increased 0.1% in December, with the indices for machinery and for computer and electronic products registering robust gains. However, large declines were recorded in nonmetallic mineral products; electrical equipment, appliances, and components; and miscellaneous manufacturing. Most other major categories of durables advanced moderately.

The index for business equipment rose 0.9% in December, with gains for all of its major components. Both transit equipment and information processing equipment increased more than 1%. The advance in information processing equipment included a sizable gain in the production of communications equipment. For the fourth quarter as a whole, the index for business equipment increased at an annual rate of 2.2%.

The production of defense and space equipment fell 0.3% in December, for its third consecutive monthly decline. Nevertheless, the index was 2.3% above its year-earlier level. Among nonindustrial supplies, the production of construction materials decreased 2% in December and more than reversed its gain a month earlier. For the fourth quarter as a whole, construction supplies fell at an annual rate of 7.6% after having risen 1.6% in the third quarter. The output of business supplies moved up 1.1% in December; an increase in commercial energy products more than offset a decline in general business supplies.

On the year as a whole, manufacturing output increased at an annual rate of 5.7%.

The full report is available from the U.S. Federal Reserve.


 

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