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Output belies Asia effect
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January 16, 1998: 10:22 a.m. ET
Industrial production rises 0.5 percent despite concerns over Pacific Rim
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NEW YORK (CNNfn) - U.S. industries kept up the pace of manufacturing in December despite Wall Street concerns over the effect of Asian economic turmoil.
Industrial production at the nation's factories, utilities and mines rose 0.5 percent last month, the U.S. Federal Reserve said Friday, slightly below estimates of a 0.6 percent gain.
While the increase trailed November's gain of 0.8 percent, it was still a good showing for the sectors, which are operating under the cloud of falling demand for their goods in Southeast Asia.
"These numbers confirm that, at least as of December, you'd be very hard pressed to see any evidence that Asia is slowing down the United States," said Jim Bianco, research director at Arbor Research and Trading Inc.
"We've maintained a pretty strong economy."
Those industrial sectors operated at their fastest rate in two years, the figures indicated. The December capacity utilization rate -- which measures the percentage of overall capacity being used -- rose to 83.4 percent, a rate not seen since 1995, from 83.2 percent in November.
The Federal Reserve said that increases in output were widespread among most of the industry groups, but the overall gain was held back slightly by a decline in motor vehicle production, which had hit a spike in November.
The industrial sector saw its production increase 5 percent over the entire course of 1997, much improved over 1996's gain of 3.5 percent. The fourth quarter provided the biggest boost to the year's results, with output jumping 7.4 percent.
The December figures were good news for all three sectors. Manufacturing production increased 0.5 percent, utility output rose 0.4 percent, and mines increased their production by 0.3 percent.
The U.S. bond market continued a strong day soon after the figures were released, with the price of 30-year Treasury bonds increasing 17/32 at a yield of 5.78 percent.
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