WASHINGTON (Reuters) – U.S. manufacturing output surged in December, likely due to a rebound in production at Boeing following the end of a devastating strike by the aerospace giant’s factory workers.
The Federal Reserve said Friday that factory production rose 0.6% last month, after an upwardly revised 0.4% rebound in November. Economists polled by Reuters expected production to rise 0.2%, following the previously announced 0.2% increase.
Factory production in December was flat compared to the same month last year. After contracting at a pace of 0.8% in the July-September period, it fell at an annual rate of 1.2% in the fourth quarter. Manufacturing, which accounts for 10.3% of the economy, has largely stabilized in recent months since the U.S. central bank began cutting interest rates.
The Institute for Supply Management’s Purchasing Managers Index rose to a nine-month high in December. But President-elect Donald Trump’s plans for widespread tariffs on imported goods could raise raw material prices and undermine the economic recovery.
Production of aerospace and other transportation equipment rose 6.3%. A strike by Boeing factory workers that ended in November depressed production across the manufacturing industry in September and October.
Automobile and parts production fell by 0.6% last month. Durable goods manufacturing production increased by 0.4%, also boosting the 1.7% increase in primary metal production. Nondurable goods manufacturing output rose 0.7% in a broad-based increase.
Mining production rose 1.8% after falling 0.5% in November.
Utility production increased 2.1% as natural gas production rose 6.2% amid subfreezing temperatures. It fell 0.7% in November.
Industrial production accelerated 0.9% last month after rising 0.2% in November, with aircraft and parts production contributing 0.2 percentage points. In December, it increased by 0.5% year-on-year, and after contracting at a pace of 0.6% in the July-September period, it contracted by 0.8% in the fourth quarter.
The industrial sector’s capacity utilization rate, which measures how well companies are utilizing their resources, rose to 77.6% from 77.0% in November. This is 2.1 percentage points below the 1972-2023 average. The manufacturing industry’s utilization rate increased by 0.4 percentage points to 76.6 in December. This is 1.7 points below the long-term average.
(Reporter Lucia Mutikani)
