U.S. Industrial Production Fell Slightly in December
By Xavier Fontdegloria
Factory output in the U.S. declined in December following two
months of gains as manufacturing production continued to be
hampered by supply-chain constraints and unusually warm weather
weighed on utility energy.
Industrial production--which includes factory, mining and
utility output--fell at a seasonally adjusted 0.1% in December
compared with the previous month, the Federal Reserve said Friday.
Economists polled by The Wall Street Journal expected factory
output to grow 0.2% on month.
In November, industrial production rose by an upwardly revised
December's drop marks the first contraction in industrial output
since September, when the effects of Hurricane Ida weighed on
production. Factory activity has been crippled for months due to
severe supply-chain strains, and a shortage of raw materials and
components, which have caused an increase in costs.
Recent surveys to goods producers show signs that these
bottlenecks eased somewhat at year-end, but economists warn that
normalcy in the supply chains is still several months away.
Manufacturing output--the biggest component of industrial
production--fell 0.3% in December compared with November. Motor
vehicle and parts production decreased 1.3%, signaling that supply
and component shortages persisted.
Mining output rose 2%, primarily reflecting gains in the oil and
gas sector, the Fed said. Utilities output decreased 1.5% as demand
for heating fell due to warmer-than-normal weather.
On an annual basis, industrial production in December rose 3.7%,
the Fed said. Output stood 0.6% above its February 2020
pre-pandemic level, it said.
Capacity utilization--which reflects how much industries are
producing compared with what they could potentially
produce--decreased by 0.1 percentage point to 76.5% in December.
Economists expected it to increase to 77%.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
January 14, 2022 09:52 ET (14:52 GMT)
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