U.S. Industrial Production Fell Slightly in December
January 14 2022 - 9:07AM
Dow Jones News
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
0.7%.
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 xavier.fontdegloria@wsj.com
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(END) Dow Jones Newswires
January 14, 2022 09:52 ET (14:52 GMT)
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