Industrial production rises in December

(AP) — Industrial production rose 0.6 percent in December as unusually cold weather helped energy utilities offset a small drop in manufacturing.

The mixed picture from Friday's report by the Federal Reserve shows that economic recovery remains uncertain, as consumers and businesses did not spend enough to spur the production of more factory goods.

Experts said the reversal of earlier manufacturing gains reflects persistent unemployment and a struggling economy.

"The basic fact is that consumers are impaired with debt, jobs are still declining and nonresidential construction activity will decline most of the year," said Daniel Mecksroth, chief economist for the Manufacturers Alliance/MAPI, an industry group.

He said manufacturing would likely continue swinging between gains and losses in the coming months as businesses clear inventory and then restock.

It was the sixth straight monthly gain in production and the reading was in line with economists' expectations.

Electric and gas utilities increased production by 5.9 percent and mines by 0.2 percent. Manufacturers produced 0.1 percent less than in November.

Construction and consumer durable goods posted losses of 2.0 percent and 0.9 percent, respectively, while paper products output fell 0.9 percent.

Still, industrial production for the fourth quarter as a whole increased at an annual rate of 7.0 percent, reflecting the economy's swing toward growth. The economy grew at an annual 2.2 percent in the third quarter, and was expected to continue growing through the end of 2009.

Meanwhile U.S. industries were operating at 72.0 percent of capacity in December. The number was up 0.5 percent for the second month in a row.

It's still 8.9 percent below the average for the years 1972 to 2008.