U.S. manufacturing output increases in December

WASHINGTON (Reuters) – U.S. manufacturing output is expected to surge in December as Boeing production recovers after a strike by workers at the company’s factories ended.

Factory output rose 0.6% last month, following an upwardly revised 0.4% rebound in November, the Federal Reserve said Friday. Economists polled by Reuters had expected output to rise 0.2%, after a previously reported 0.2% increase.

Factory production in December was unchanged compared to the same period last year. This was a 1.2% annualized decline in the fourth quarter, after falling 0.8% in the July-September 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 hit a nine-month high in December. But widespread tariffs on imports planned by the incoming administration of Donald Trump could raise commodity prices and hamper the recovery.

Aerospace and other transportation equipment production increased 6.3%. The strike by Boeing factory workers, which ended last November, reduced overall manufacturing production in September and October.

Last month, automobile and parts production decreased by 0.6%. Durable manufacturing production increased by 0.4%, and primary metal production also increased by 1.7%. Non-durable goods manufacturing output rose 0.7% amid broad gains.

Mine production rose 1.8% after falling 0.5% in November.

Utility production rose 2.1%, driven by a 6.2% increase in natural gas production amid below-freezing temperatures. This follows a 0.7% decline in November.

Industrial production increased by 0.9% last month, and aircraft and parts production increased by 0.2 percentage points, following a 0.2% increase in November. It was up 0.5% year-on-year in December, down 0.6% in the July-September quarter, and then down 0.8% in the fourth quarter.

The industrial sector’s utilization rate, which is an indicator of how fully a company is utilizing its resources, rose from 77.0% in November to 77.6%. This is 2.1 percentage points lower than the average between 1972 and 2023. The manufacturing operation rate was 76.6 in December, up 0.4 percentage points from the previous month. This is 1.7 percentage points lower than the long-term average.

(Reporter Lucia Mutikani)