U.S. industrial production rises above expectations in December

Industrial production in the U.S. grew on a sequential basis in December, coming in above consensus expectations. Industrial output rose 0.9 percent month-on-month, as compared with consensus expectations of a rise of 0.5 percent. The November data was downwardly revised by three-tenths to -0.1 percent sequentially.

Delving into details, manufacturing production was up a modest 0.1 percent sequentially, as compared with expectations of 0.3 percent sequentially. This was mainly driven by production of motor vehicles & parts, which rose strongly by 2 percent.

Stripping this category, manufacturing production fell 0.1 percent. Utilities production recovered sharply, seeing a growth of 5.6 percent sequentially, coming in stronger than what was expected. There were equal-sized rises in electricity and natural gas production, underpinned by cold-weather conditions in December. In the meantime, mining production rose a robust 1.6 percent on sequential basis.

“Solid data on utilities boosted our estimate for Q4 private consumption growth by two-tenths. Furthermore, data on vehicle assemblies imply higher inventory accumulation.  Taken together, our Q4 GDP tracking estimate was revised higher by a tenth, to 3.1 percent, after rounding”, stated Barclays in a research report.

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