US industrial production edges up to close out consistent sluggish year

By Mark Niquette

US industrial production edged up in December, consistent with sluggish manufacturing output that closed out a weak 2023.
 

The 0.1% advance in production at factories, mines and utilities followed no change a month earlier, Federal Reserve data showed Wednesday. 

Manufacturing output also rose 0.1% in December, helped again by a pickup in motor-vehicle production tied to the end of the United Auto Workers’ strike. Excluding autos, factory production slipped 0.1%, the third-straight monthly decline.

The Fed’s report also showed a decline in utility output, while mining increased.

Factory output decreased an annualized 2.2% in the fourth quarter, wrapping up the weakest year for manufacturing since 2020. Recent surveys suggest the sector is continuing to struggle for momentum.

On Tuesday, a report from the New York Fed showed factory activity in the state deteriorated sharply at the start of 2024, with an index dropping to the lowest level since May 2020. The Institute for Supply Management’s broader measure of manufacturing across the US has been in contraction for 14 straight months.

The rise in December manufacturing output reflected another solid gain in auto production as well as an increase in non-durable goods. Output of consumer goods edged up 0.2%, while output of materials rose slightly.

Capacity utilization at factories, a measure of potential output being used, held at 77.1%. The overall industrial utilization rate was also unchanged. Both are more than a percentage point below their long-run averages.