The numbers: Industrial production rose 1.6% in December, the Federal Reserve reported Friday. That’s the largest gain since July.
The gain was well above Wall Street expectations of a 0.5% gain, according to a survey by the Wall Street Journal.
For the fourth quarter, industrial production rose at an 8.4% annual rate.
What happened: Manufacturing output rose 0.9% in December despite a drop in production of cars and trucks. This was the 8th straight gain in manufacturing. Car and truck output fell 1.6% in December.
Mining production rose 1.6%, led by a rebound in the oil and gas sector, after a 2.8% rise in the prior month.
Utility output rebounded to a 6.2% rise as cold weather returned after a 4.5% decline in November.
Capacity utilization continued to inch higher, rising to 74.5% in December. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities. It is not 13.3 percentage points higher than its low point in April.
Big picture: Manufacturing has been a bright spot in the economy and has rolled along even as the broader economy has slowed. It was easier to re-engineer factory floors during the pandemic than it has been to open the shuttered service economy. Manufacturing is still about 3% below the pre-pandemic peak. At one point, the gap was more than 20%.
Market reaction: Stocks opened lower Friday after a weak retail sales report for December. The Dow Jones Industrial Average
was down 207 points at the open.