The numbers: Industrial production slipped 0.1% in December, the Federal Reserve reported Friday.
The decline was below Wall Street expectations of a 0.2% gain, according to a survey by The Wall Street Journal.
Output in November was revised up to 0.7% from the prior estimate of 0.5%.
Capacity utilization inched lower to 76.5% in December from 76.6% in the prior month. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities. Economists had forecast a 77% rate.
Key details: Auto production sank 1.3% in December and was about 6% lower for the year. Total manufacturing declined 0.3%.
Utility output fell 1.5% on the relatively warm weather for the month. Mining, which includes oil and gas production, rose 2%.
Big picture: Manufacturing remains a bright spot in the economy. For the fourth quarter as a whole, total industrial production is up 4%. For the year, industrial production is up 3.7%.
The decline in auto production was a surprise to many economists who had expected output to ramp up due to lean inventories.
Looking ahead: “Overall, manufacturing activity is at risk of loss in momentum from spread of the Omicron variant that is resulting in absenteeism and could further aggravate supply chains and shortages,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Market reaction: U.S. stocks
DJIA,
-0.45%
SPX,
-0.08%
opened lower Friday on concerns about relatively hawkish comments from Fed officials this week.
