US industrial production jumps 1.6 per cent in December
U.S. industrial production rose 1.6per cent in December, a third straight monthly gain, but remains below its pre-pandemic level.
The December gain in industrial output followed a 0.5per cent increase in November and a 1per cent increase in October, the Federal Reserve reported Friday. Even with those gains, industrial output is still about 3.3per cent below its level in February before the pandemic hit.
Manufacturing increased 0.9per cent, its eighth straight monthly gain, even as production of motor vehicles and parts declined 1.6per cent.
That follows a string of gains for the auto sector, including last month's strong 5per cent increase. Without the drag in the auto sector last month, manufacturing posted gains of 1.1per cent.
Mining production rose 1.6per cent, while utilities' output rose 6.2per cent as a rebound in December demand followed a 4.2per cent decline in November due to unseasonably warm weather.
U.S. industry operated at 74.5per cent of capacity in December, still below the pre-pandemic rate of 76.9per cent in February.
While Decembers topline numbers were better than economists had expected, there is concern that rising coronavirus infections and a rocky vaccination campaign could further hamstring an already uneven recovery for the U.S. economy.
On Thursday night, President-elect Joe Biden unveiled a USD1.9 trillion coronavirus plan that would speed up vaccines and deal financial help to those struggling with the pandemics prolonged economic fallout.
Oren Klachkin, an economist with Oxford Economics, said a financial relief package would provide a much-needed immediate boost for the economy, but added that in the long-term, “vaccine roll outs will shift consumer spending more towards services, softening consumer goods demand and weighing on industrial activity.”
The Institute for Supply Management reported Tuesday that American factories grew in December at the fastest pace in more than two years.
The manufacturing sector has weathered the pandemic better than the battered services sector, but continues to face virus-related headwinds such as factory shutdowns needed to sanitize facilities and difficulties in hiring new workers as the virus surges again.
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