The number: U.S. industrial production fell 0.7% in December, the Federal Reserve reported Wednesday. It is the biggest monthly decline since September 2021.
The decline was steeper than economists expectations of a 0.1% decline, according to a survey by The Wall Street Journal.
Output in November was revised down to a 0.6% drop, much worse than the initial estimate of a 0.2% decline.
Production was down at a 1.7% annual rate in the fourth quarter.
Capacity utilization fell to 78.8% in December from a revised 79.4% in the prior month. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities.
Economists had forecast a 79.6% rate.
Key details: Manufacturing alone fell a sharp 1.3% in December after a 1.1% drop in the prior month.
Motor vehicles and parts output dropped 1% after a 3.5% fall in the prior month.
Utilities output rose 3.8% in December on cold weather. Mining output, which includes oil and natural gas, fell 0.9% after a 1.2% fall in the prior month.
Big picture: Weakness in industrial output is gathering steam. Business investment is being held down by rising interest rates, the strong dollar and the weak global economy.
Market reaction: Stocks
were set to open higher after soft producer inflation data earlier on Wednesday. The yield on the 10-year Treasury note
fell to 3.38%.