A Boost In U.S. Industrial Production

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The increase in U.S. industrial production was greater than expected in December due to the end of the month’s unseasonably cold weather boosted the demand for heating, while manufacturing output further declined.

On Wednesday, the Federal Reserve stated that industrial output increased 0.9 percent in December, driven by solid gains in mining production following the downward revised 0.1 percent drop in November.

Economists had predicted that industrial production would advance 0.4 percent in December after a previously reported 0.2 percent for the month prior. Industrial production increased at an annual rate of 8.2 percent during the fourth quarter, the largest increase since the second quarter of 2010.

For all of 2017, industrial output gained 1.8 percent, which was the first and largest increase in three years.

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Both a strengthening global economy and a weakening dollar are supporting the industrial sector, which is assisting making U.S. exports more competitive compared to the U.S.’s main trading partners. Earlier this month, a survey early indicated the increase in factory activity in December, with a measure of new orders recording its best reading since January 2004.


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Mining production increased 1.6 percent amid a rally in oil and gas well drilling. Utilities production increased 5.6 percent after November’s 3.1 percent decline.

The end of December brought on the bitter cold for much of the nation. The surge in utilities demand will advance consumer spending in the fourth quarter.

Manufacturing output inched up a minimal 0.1 percent last month compared to November’s rise of 0.3 percent. Manufacturing production surged 1.5 percent for the month of October.

Last month, manufacturing output was suppressed by a 1.5 percent drop in the production of primary metals. Motor vehicle and parts production rose 2.0 percent. Manufacturing production increased at a 7.0 percent rate for the fourth quarter.

With output picking up some speed in December, capacity utilization a measure of how industries use their resources increased to 77.9 percent from November’s 77.2 percent. Fed Officials use this to measure of how much “slack” remains in the economy.

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