WASHINGTON (Reuters) – U.S. manufacturing rose in December likely as output at Boeing picked up after a strike by factory workers at the aerospace giant ended.
Factory output rose 0.6% last month after a revised 0.4% rise in November, the Federal Reserve said on Friday. Economists polled by Reuters had forecast output growth of 0.2%, following a previously reported rise of 0.2%.
Production in factories in December was unchanged on the year-on-year level. It fell at an annual rate of 1.2% in the fourth quarter after falling 0.8% in the July-September quarter. Manufacturing, 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 new administration could raise raw material costs and undermine any recovery.
Production of aviation and various transport equipment increased by 6.3%. A strike by Boeing factory workers, which ended in November, reduced overall production in September and October.
Production of motor vehicles and parts fell last month by 0.6%. Durable goods production rose 0.4%, also boosted by a 1.7% increase in primary metals production. Non-durable goods production rose 0.7% amid broad-based gains.
Mining output rose 1.8% after falling 0.5% in November.
Utilities production rose 2.1%, driven by a 6.2% increase in natural gas production at low temperatures. This followed a 0.7% drop in November.
Industrial production accelerated 0.9% last month, with aircraft and 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 falling 0.6% in the July-September quarter.
Capacity utilization for the industrial sector, a measure of how fully companies are using their resources, rose to 77.6% from 77.0% in November. That is 2.1 percentage points below the 1972-2023 average. The operating rate for the manufacturing sector rose 0.4 percentage points in December to 76.6. This is 1.7 percentage points below the long-term average.
(Reporting by Lucia Mutikani)
