WASHINGTON (Reuters) – U.S. manufacturing output rose in December likely as production at Boeing recovered after the end of a crippling strike by workers at the aerospace giant’s factory.
Factory output rose 0.6% last month following an upwardly revised 0.4% rebound in November, the Federal Reserve said on Friday. Economists polled by Reuters had forecast output would rise 0.2% after a 0.2% rise previously reported.
Production at factories was unchanged year-on-year in December. It fell at an annualized rate of 1.2% in the fourth quarter after contracting at a rate of 0.8% in the July-September quarter. The manufacturing sector, which accounts for 10.3% of the economy, has largely stabilized in recent months after the US central bank began cutting interest rates.
The Institute for Supply Management’s Purchasing Managers Index rose to a nine-month high in December. But sweeping tariffs on imported goods planned by President-elect Donald Trump’s incoming administration could raise raw material costs and undermine any recovery.
Production of aerospace and various transportation equipment increased by 6.3%. The Boeing factory workers’ strike, which ended in November, depressed overall manufacturing production in September and October.
Production of motor vehicles and spare parts fell 0.6% last month. Manufacturing production of durable goods increased 0.4%, also driven by a 1.7% increase in primary metal production. Non-durable goods manufacturing output rose 0.7% amid broad gains.
Mining production advanced 1.8% after falling 0.5% in November.
Utility production rose 2.1%, driven by a 6.2% increase in natural gas production amid frigid temperatures. This followed a 0.7% drop in November.
Industrial production accelerated 0.9% last month, with aircraft and spare parts production contributing 0.2 percentage points, after rising 0.2% in November. It rose 0.5% year-on-year in December and contracted at a rate of 0.8% in the fourth quarter after contracting at a rate of 0.6% in the July-September quarter.
Capacity utilization for the industrial sector, a measure of the extent to which companies are using their resources, rose to 77.6% from 77.0% in November. It is 2.1 percentage points below its 1972-2023 average. The operating rate of the manufacturing sector increased 0.4 percentage points in December to 76.6. It is 1.7 percentage points below its long-term average.
(Reporting by Lucía Mutikani)