Industrial production decreased 0.1 percent in December after rising 1.3 percent in November, according to the Federal Reserve. The decrease in December reflected a sharp drop in the output of utilities, as warmer-than-usual temperatures reduced demand for heating; excluding utilities, industrial production rose 0.7 percent. Manufacturing posted a gain of 0.3 percent for its fourth consecutive monthly increase. The index for mining increased 2.2 percent after falling in the previous two months.
“Manufacturing’s moderate growth rate in December is better than it seems,” said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation. “Production was up in 12 of the 20 major manufacturing industries but fell in eight industries."
At 106.5 percent of its 2007 average, total industrial production in December was 4.9 percent above its level of a year earlier. For the fourth quarter of 2014 as a whole, industrial production advanced at an annual rate of 5.6 percent, with widespread gains among the major market and industry groups. Capacity utilization for the industrial sector decreased 0.3 percentage point in December to 79.7 percent, a rate that is 0.4 percentage point below its long-run (1972–2013) average.
Among the major market groups, both consumer goods and business supplies posted decreases of around 1 percent in December as a result of a drop in sales by electric and gas utilities; all of the other major market groups recorded gains. Excluding energy products, the output of consumer nondurables increased 0.4 percent, while the production of consumer durables fell 0.5 percent. The output of construction supplies jumped 1.4 percent, the largest gain among the major market groups. The index for business equipment edged up 0.1 percent, and the index for defense and space equipment moved up 0.4 percent. The production of materials also rose 0.4 percent, with gains in all of its major components. Despite the drop in the output of utilities, the index for energy materials moved up because of an increase in oil and natural gas extraction.
Manufacturing output rose 0.3 percent in December and at an annual rate of 5.2 percent in the fourth quarter. Manufacturing output in December was 4.9 percent above its level of a year earlier. The production of durable goods increased 0.2 percent in December, and the production of nondurable goods rose 0.4 percent.
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