U.S. industrial production rebounded in December, reflecting gains in demand for business equipment, automobiles and construction materials. Output at factories, mines and utilities rose 0.4 percent after a revised 0.3 percent decline in November, figures from the Federal Reserve showed today in Washington. Economists forecast a 0.5 percent rise for December, according to the median estimate in a Bloomberg News survey. Factory production, which makes up about 75 percent of total output, climbed by the most in a year.
Gains in consumer demand and corporate investment combined with lean inventories are prompting factories to hire more workers and boost hours. Europe’s financial crisis and a weaker euro still threaten to restrain purchases of American-made goods, limiting production growth.
“Manufacturing remains an engine of growth for the U.S economy,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who accurately forecast the December gain. While shipments to Europe are slowing, “manufacturing has benefited from exports to emerging markets, including China. The more resilient those economies are, the better it is for U.S. manufacturing,” he said.
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