|Also yesterday, the Commerce Department reported that retail sales rose for a sixth consecutive month. (Justin Sullivan/Getty Images)|
Industrial production continues its rise
Increase in December was the largest jump for sector in five months
WASHINGTON — Industrial production rose in December by the largest amount in five months, providing the economy with solid momentum heading into the new year.
Activity at the nation’s factories, mines, and utilities increased 0.8 percent last month, the Federal Reserve said yesterday. Industrial production was up in every month but one in 2010.
Overall industrial activity has risen 11 percent since hitting its recession low in June 2009. But it is still 6 percent below its peak reached in September 2007.
Factory production, the biggest slice of industrial output, rose 0.4 percent, the sixth straight monthly increase. Makers of computers and electronic products, clothing and leather, chemicals, and other products were among the industries seeing gains. But auto production dipped.
“Manufacturing looks like it is doing its job and moving the economy ahead,’’ said John Silvia, chief economist at Wells Fargo.
Other economic reports showed:
■ Retail sales rose for a sixth consecutive month in December, the Commerce Department said. Sales are 13.5 percent above the recession low hit in December 2008.
■ Consumer prices rose 0.5 percent last month, the largest increase in 18 months and a reflection of rising gas prices, the Labor Department said. But outside of energy costs, there was little sign of widespread inflation. Core inflation, which strips out volatile energy and food, was up 0.1 percent in December.
■ US businesses added to their inventories for an 11th consecutive month in November as sales posted another strong increase, Commerce said.
Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said in a speech yesterday that recent economic activity suggests the economic recovery is through its soft patch. He said he expects stronger growth this year, between 3.5 percent and 4 percent.
Rising factory production has played a crucial role in helping the economy.
Factories started producing more as US companies placed more orders to replenish stockpiles. Then in the final months of 2010, consumers and businesses showed a bigger appetite to spend, encouraged in part by the improving economy.
A recovering global economy also is helping. Sales of US exports to foreign countries has been a key force supporting US economic growth.