US Industrial Output Slows In December: Fed

A downturn in the US manufacturing sector in the final month of 2021, notably the hard-hit auto sector, caused overall industrial output to dip in December, the Federal Reserve said Friday

Washington, (APP - UrduPoint / Pakistan Point News - 14th Jan, 2022 ) :A downturn in the US manufacturing sector in the final month of 2021, notably the hard-hit auto sector, caused overall industrial output to dip in December, the Federal Reserve said Friday.

Industrial production slipped 0.1 percent, surprising economists expecting a modest increase, as manufacturing fell 0.3 percent in the month, according to the data.

Amid the ongoing shortage of key computer chips that has hampered auto manufacturing, motor vehicles and parts fell 1.3 percent in December and was about six percent lower than a year earlier, the Fed said.

That decline ended a two-month streak of gains and offered "a sign that the sector's travails are far from over," said Kathy Bostjancic of Oxford Economics.

Despite the downbeat end to the year, industrial output is 3.7 higher than in December 2020, the report said.

Bostjancic said that "solid demand will keep industrial production growing strongly in 2022." However, she cautioned that "industrial supply chains will continue to face a difficult operating environment this year; the latest surge in (Covid-19) cases already looks to be exacerbating labor problems." Rising oil prices helped push the mining sector up two percent compared to November, and output was 11 percent higher than the final month of 2020.

However, the Fed noted, "the index for mining in December was about 6 percent below its pre-pandemic level."Utilities dropped 1.5 percent in December, which "primarily resulted from a drop in the output of gas utilities, as warmer-than-normal temperatures reduced demand for heating."Output in the sector is 3.4 percent below the year-ago level, the report said.