U.S. industrial production and factory utilization both rose modestly in December to close out the year on a welcoming note. Clearly, the industrial sector is still on the recovery trail. In that sense it should join the homebuilding arena, where data issued earlier this morning, showed a decent, but not overwhelmingly performance on the construction front last month.
As to this report, the data showed that industrial production, which tracks the output of all U.S. manufacturers, utilities, and mines, rose by a seasonally adjusted 0.3% last month, matching expectations. For the full 12 months, this metric was 3.7% better than in 2012, a representative performance in a slowly expanding economy. At the same time, capacity utilization--or factory usage--inched up 0.1% to 79.2% last month. That was slightly ahead of expectations. It was also the best showing in many months.
As to the various components in the industrial production category, manufacturing, which is by far the largest component in this series, rose 0.4% in December from November. That was the fifth monthly increase in succession. The gain here was led by increasing output for primary metals, electrical equipment, appliances and cars. Food, apparel and printing also pushed a bit higher in the month. However, there also were setbacks in wood products, machinery, and textiles.
On the other hand, utility production ticked down a bit, for the first time in four months, dropping by 1.4% in December. Weather and notable deviations in monthly temperatures can affect this category. However, given the materially colder weather across the country last month, this decrease is somewhat mystifying. Finally, production at the nation's mines ticked up by 0.8%, its second solid gain in succession.
This report was decent, overall, but not exciting in any respect. All told, we still expect the nation's economy to have expanded by close to 3% in the recently concluded quarter, a somewhat better showing than we had seen earlier.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.