By Xavier Fontdegloria
U.S. industrial production declined again in December, weighed by lower factory output, in a sign manufacturers are pulling back in response to softening demand for goods.
Industrial production--which comprises manufacturing, mining and utility output--decreased 0.7% in December, its second consecutive monthly drop, after a downwardly revised 0.6% drop recorded in November, according to data from the Federal Reserve published Wednesday.
Economists polled by The Wall Street Journal expected industrial production to decrease by a marginal 0.1%.
The U.S. manufacturing sector is slowing down as demand for goods weakens amid weakening economic growth and higher interest rates in the U.S. and globally. December's monthly drop is the steepest since September 2021.
Industrial production decreased at an annualized rate of 1.7% in the fourth quarter of 2022, the Fed said.
December's decline in overall industrial output was driven lower manufacturing output, the biggest component of industrial production, which fell 1.3% on month in December after a 1.1% decline in November.
Drops in both durable goods and nondurable goods manufacturing were broad-based, including a 1% drop in production of motor vehicles and parts.
Utilities production jumped 3.8% in December as cold temperatures boosted demand for heating, partly offsetting the fall in overall production, while mining output decreased 0.9%.
Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, decreased to 78.8% in December from 79.4% the prior month, the Fed said.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
01-18-23 0956ET
