The numbers: Business output rose 1.6% in December, the Federal Reserve reported Friday. That’s the biggest gain since July.
The gain was much higher than Wall Street’s expected 0.5% gain, according to a study by the Wall Street Journal.
For the fourth quarter, industrial output rose at an annual rate of 8.4%.
What happened: Manufacturing output rose 0.9% in December despite falling car and lorry production. This was the 8th direct benefit in manufacturing. Car and truck production fell 1.6% in December.
Mining output rose 1.6%, led by a reversal in the oil and gas sector, after a 2.8% increase in the previous month.
Utility yields fell to a 6.2% rise when cold weather returned after a 4.5% decline in November.
Capacity utilization continued to rise, rising to 74.5% in December. The level of capacity utilization reflects the limitations of the operation of the country’s factories, mines and facilities. It is now 13.3 percentage points higher than its April low point.
Big picture: Manufacturing has become a prominent place in the economy and has progressed even as the economy as a whole has slowed down. Factory floors were easier to reinvent during the pandemic than it was to open a closed service economy. Manufacturing is still about 3% lower than the pre-pandemic peak. At one time, the gap was more than 20%.
Market response: Stocks opened lower Friday after a weak sell-off report for December. Dow Jones industrial average DJIA,
down 207 points at the opening.