U.S. Industrial Production Declines in December
by:Tom Moeller
|in:Economy in Brief
Summary
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Factory production falls sharply again.
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Consumer output eases, capital equipment weakens.
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Capacity utilization declines again.
In a sign that activity in the factory sector came under increasing pressure in the second half of 2022, industrial production declined 0.7% (+1.6% y/y) during December after falling 0.6% in November. Production held steady in October. A 0.1% decline had been expected in the Action Economics Forecast Survey.
By industry groups, manufacturing production declined 1.3% in December (-0.5% y/y) after November’s 1.1% drop. Durable goods fell 1.1% (+0.8% y/y) after falling 1.4% in November. Computer & electronic products production fell 1.0% (-2.9% y/y), down for the fourth straight month. Motor vehicle & parts production fell 1.0% (+5.1% y/y) after falling 3.5% in November. Electrical equipment & appliance production weakened 1.5% in December (-0.4% y/y) following a 1.6% drop. Machinery output collapsed 3.4% last month (-2.9% y/y) after a 1.7% decline. Fabricated metal product output fell 1.3% (+1.7% y/y) but primary metals rose 0.8% (-2.8% y/y).
In the nondurable goods sector, production weakened 1.5% (-1.7% y/y) after falling 0.8% in November. Apparel output weakened 0.4% in December (+10.1% y/y) after rising 1.7% in November, while petroleum & coal product output fell 3.1% (-2.3% y/y) after a 0.6% slip. Chemical output dropped 1.4% (-2.0% y/y) after falling 1.1%. Paper production fell 1.6% (-8.2% y/y), the eighth consecutive monthly decline. Food, beverages & tobacco production declined 1.0% (+0.1% y/y) after slipping 0.1% in November.
Utilities output rose 3.8% (9.7% y/y) in December after rising 4.5% in November. Mining activity fell 0.9% in December (+5.8% y/y), after dropping 1.2% in the prior month.
By market groups, consumer goods output eased 0.1% (+1.7% y/y) in December, following a 0.5% decline. Business equipment production fell 2.0% (+1.5% y/y) while construction supplies production slumped 1.4% (-2.1% y/y).
Amongst special classifications, factory output of selected high-tech industries fell 0.2% in December (-0.6% y/y), down for the fifth straight month. Manufacturing production excluding both selected high-tech and motor vehicles & parts fell 1.3% (-0.9% y/y) after a 0.9% decline in November.
Capacity utilization fell to 78.8% in December from 79.4% in November. A 79.6% rate had been expected. Factory utilization fell to 77.5% in December from 78.5% in the prior month. This was the lowest utilization rate since September 2021.
Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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