Production increased for the third month in a row, but remained 3.3 percent below the February level, the month before the outbreak of the Coronavirus. Industrial production rose for the eighth month in a row, even as production of cars and their parts declined.
After an unusually warm November, the weather in the US turned colder in December, so demand for heating was much higher, leading to a 6.2% increase in utility company production on a monthly basis. Manufacturing output grew by 0.9 percent and mining by 1.6 percent.
Industrial production as a whole decreased by 7.0 percent in 2020, the worst number since it fell by 11.5 percent in 2009. A year ago, industrial production grew another 0.8% in 2019, 3.9% in 2018, and 2.3% in 2017.
In December, industrial energy use was at 74.5 percent, up from 73.4 percent the previous month, but still 4.8 percentage points lower than the long-term average. Experts reported weaker data at 73.6 percent.
Fed policymakers generally view the rate of use of capacity as an indication of how much maneuver space the economy still has to grow before inflation begins. Although the main indicators of industrial production exceeded analysts’ expectations in December, it is feared that the rapid spread of the second wave of the Coronavirus epidemic and the rampant vaccination campaign will exacerbate an already disproportionate recovery in the US economy.
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