US Industrial Output Rises More than Expected in December

US industrial production increased by 0.9 percent month-over-month in December 2017, easily beating market expectations of 0.4 percent and following a downwardly revised 0.1 percent drop in November.

Utilities output jumped 5.6 percent in December, recovering from a contraction of 3.1 percent in the previous month, boosted by both electric production (5.6 percent from -3.6 percent in November) and natural gas output (6 percent from 0.5 percent). Also, mining grew at a faster 1.6 percent, compared to a 0.1 percent gain in November.

Meanwhile, manufacturing production growth eased to 0.1 percent in December from 0.3 percent in November. Durable manufacturing went up 0.3 percent after gaining 0.4 percent in the previous month, as output rose for motor vehicles and parts (2 percent from -0.5 percent) and machinery (0.4 percent, the same as in November). Production of computer and electronic products fell 0.1 percent after a 1 percent rise in the previous month. By contrast, nondurable manufacturing edged down 0.1 percent, following an advance of 0.2 percent in November, as output fell for chemicals (-0.7 percent from 0.6 percent) and petroleum and coal products (-0.7 percent from -1.1 percent). Food, beverage, and tobacco products output grew 0.6 percent, after a 0.6 percent decline in November.

Compared to the same month of 2016, industrial production rose 3.6 percent, as output rose for manufacturing (2.4 percent), mining (11.5 percent) and utilities (1.8 percent).

For the fourth quarter as a whole, total industrial production jumped 8.2 percent at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma.

Considering 2017 as a whole, industrial production increased by 1.8 percent, the first and largest gain since 2014.

Capacity utilization for the industrial sector was 77.9 percent, a rate that is 2.0 percentage points below its long-run (1972–2016) average.

US Industrial Output Rises More than Expected in December

Federal Reserve | Joana Ferreira |
1/17/2018 2:34:57 PM