WASHINGTON — The Federal Reserve says U.S. industrial production rose 0.9 per cent in December, pulled higher by a surge in utility output, another sign of health for the American economy.
Utility production shot up 5.6 per cent last month, the most since March 2017, as Americans turned up the heat during a year-end cold snap in the East and Midwest. Manufacturing output edged up 0.1 per cent, the fourth straight monthly increase, helped by a healthy uptick in production of cars, trucks and auto parts. Mining production rose 1.6 per cent, largely because of an increase in extraction of oil and natural gas.
Overall industrial production — including manufacturing, mining and utilities — rose 3.6 per cent over the past year. It was the best annual performance since 2010.
The U.S. economy is looking healthy. Growth clocked in at a 3.2 per cent annual pace from July through September after growing 3.1 per cent in the second quarter. Unemployment is at a 17-year low of 4.1 per cent. Factories added 196,000 jobs last year, the most since 2014.
Jennifer Lee, senior economist at BMO Capital Markets, said the December industrial production report "is consistent with a solid growth story" and supports BMO's forecast of solid 2.9 per cent U.S. economic growth in the fourth quarter of 2017.
Industrial production picked up at the end of 2017 after being held down by the impact of Hurricanes Harvey and Irma. American industry, benefiting from an improving world economy and a drop in the dollar that makes U.S. products less expensive abroad, was running at 77.9 per cent of capacity last month, the highest since February 2015.
Paul Wiseman, The Associated Press