The fall in demand for heating has brought industrial production below expectations.
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Industrial production in the United States fell 0.3% in December compared with November, and is below expectations, weighed down by the drop in demand for heating, temperatures having been unusually mild, according to data released Friday by the Federal Reserve (Fed).
Compared with December 2018, the drop for all industrial production is 1%. And for the whole of the fourth quarter, the decline was 0.5% compared to the fourth quarter of 2018.
Analysts were expecting a very slight increase of 0.1% in one month but demand for public services such as water and above all heating fell by 5.6% in December, compared with November which had experienced colder temperatures. This overshadowed the 0.2% increase in the manufacturing sector and the 1.3% increase in the mining sector.
“The drop in public services is the result of a sharp drop in heating demand, the unusually high temperatures in December followed by unusually cold temperatures in November,” the Fed said in its press release.
Auto production was down from November when it was boosted by the return to assembly lines of General Motors employees after a long five-week strike.
On the other hand, increases of more than one point were recorded in particular by information processing equipment, defense and space equipment and the supply of construction equipment.
The industrial capacity utilization rate fell 0.4 points in December to 77%, 2.8 percentage points below the average.
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