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Industrial productivity.

Industrial Production

Industrial production rose 0.4 percent in December following an upward revised increase in November of 0.3 percent and slightly smaller declines in October and September than were reported last month. The extremely cold weather in December caused a sharp rise in utility output, but also resulted in some disruptions in production, particularly in petroleum refining and construction supplies. Aircraft production returned to normal in December following the settlement of a strike at a major producer in late November. At 142.8 percent of the 1977 annual average, the total index in December was 1.7 percent higher than that of a year earlier; for the fourth quarter on average, total industrial output was little changed from the third quarter. Manufacturing output rose 0.2 percent in December, and factory utilization edged down to 83.1 percent. Detailed data for capacity utilization are shown separately in "Capacity Utilization," Federal Reserve monthly statistical release G.3.

In market groups, production of consumer goods rose 0.6 percent in December, mainly reflecting a surge in electricity and gas output for residential use and an increase in light truck production. Auto assemblies, at an annual rate of 6.2 million units, were unchanged from November. Output of home goods, particularly appliances, remained weak. Production of business equipment rose sharply last month as aircraft output rebounded; production of manufacturing equipment has changed little recently, but most other major sectors have posted gains.

Output of construction supplies fell 0.7 percent following sizable increases in the previous two months; the December decline reflected, at least in part, the effects of the severe weather. Materials production decreased 0.3 percent as output of basic metals, coal mining, and parts for consumer durables, mainly motor vehicles, fell significantly. These losses more than offset the weather-related jump in utility output.

In industry groups, excluding the comeback in the aircraft industry, manufacturing production would have been nearly unchanged in December. Output of motor vehicles and parts remained relatively weak in December; other related industries, such as steel, fabricated metal products, and textiles, also have declined, on balance, in recent months. The production of paper, printing, and publishing, and nonelectrical machinery posted further gains in December. Outside of manufacturing, mining output fell because coal production was curtailed by an unusually long holiday shutdown; utility output rose sharply because of the extremely cold weather.
COPYRIGHT 1990 Board of Governors of the Federal Reserve System
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Publication:Federal Reserve Bulletin
Date:Mar 1, 1990
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