Factory Production in U.S. Rose Less Than Forecast in Decemberby
Factory output rose less than forecast in December, held back by less production of textiles and chemicals, indicating U.S. manufacturing will take time to recover.
Production at factories, which makes up 75 percent of all output, climbed 0.2 percent after a 0.1 percent decrease in November, a Federal Reserve report showed Wednesday. The median forecast in a Bloomberg survey called for a 0.4 percent advance. Total industrial output, which includes mines and utilities, rose a larger-than-estimated 0.8 percent as temperatures returned to normal.
Modest global demand and domestic business investment are limiting American producers’ ability to bounce back quickly after a prolonged period of weakness. A stronger dollar could also hamper foreign sales even as resilient U.S. household demand helps boost output of motor vehicles and other consumer goods.
While manufacturing output increased at a 0.7 percent annual rate in the fourth quarter, it was unchanged from the same three months in 2015.
Estimates in the Bloomberg survey for manufacturing output, which accounts for about 12 percent of the economy, ranged from no change to an increase of 0.6 percent.
For total industrial production, estimates ranged from increases of 0.2 percent to 1.2 percent. November output dropped 0.7 percent, revised down from the 0.4 percent decrease initially estimated.
Consumer durable goods output rebounded in December, rising 1.1 percent on increased automobile production, after a 1 percent decrease in November. Business equipment production also bounced back, climbing 0.7 percent after a 0.7 percent drop in November.
Capacity utilization, which measures the amount of a plant that is in use, increased to 75.5 percent in December from 74.9 percent the prior month.
Utility output surged 6.6 percent in December, the most since the end of 1989, after November’s 4.6 percent decline. Last month, temperatures became more seasonal after warmer conditions in November, the Fed said.
Mining production, including oil drilling, was unchanged in November after a 0.7 percent decrease. A 9.3 percent jump in the drilling of oil and gas wells was offset by decreases in other types of mining.
U.S. rig counts increased to 665 in the week ended Jan. 6, the highest in a year, as increasing energy prices gives a lift to the count, according to Baker Hughes Inc. data.