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US industrial production fell for third straight month in December as warm weather hit utilities

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WASHINGTON — U.S. industrial production dropped for the third straight month in December as utilities reduced output amid unusually warm weather and energy companies cut back in the face of falling oil prices.

Industrial production, which includes manufacturing, mining and utilities, contracted 0.4 percent after retreating a revised 0.9 percent the previous month, the Federal Reserve reported Friday.

American industry has struggled in recent months even as the overall economy appears solid. The November decline was the biggest drop since May 2009. Output fell 0.2 percent in October and was flat in September; the Fed originally reported that production fell in September.

PHOTO: In this photo taken Monday, Dec. 7, 2015, the second Boeing 737 MAX airplane being built is shown on the assembly line in Renton, Wash. U.S. industrial production dropped for the third straight month in December 2015, as utilities reduced output amid unusually warm weather and energy companies cut back in the face of falling oil prices. Industrial production, which includes manufacturing, mining and utilities, contracted 0.4 percent after retreating a revised 0.9 percent the previous month, the Federal Reserve reported Friday, Jan. 15, 2016. (AP Photo/Ted S. Warren)
In this photo taken Monday, Dec. 7, 2015, the second Boeing 737 MAX airplane being built is shown on the assembly line in Renton, Wash. U.S. industrial production dropped for the third straight month in December 2015, as utilities reduced output amid unusually warm weather and energy companies cut back in the face of falling oil prices. Industrial production, which includes manufacturing, mining and utilities, contracted 0.4 percent after retreating a revised 0.9 percent the previous month, the Federal Reserve reported Friday, Jan. 15, 2016. (AP Photo/Ted S. Warren)

"Overall, with the dollar still rising at a rapid pace and global demand clearly pretty weak we don't expect much from the U.S. manufacturing sector this year," Paul Ashworth, chief U.S. economist at Capital Economics, wrote in a research report. "We still expect the domestic service-based economy to perform well this year."

Warm weather pushed utility output down 2 percent in December on top of a 5 percent drop in November. Mining production, which includes oil drilling, fell 0.8 percent. That was the fourth straight monthly drop.

Manufacturing production slid 0.1 percent after falling 0.1 percent in November. U.S. factories have been hurt by weakening economies overseas and a strong dollar that makes American-made products more expensive in foreign markets.

The Commerce Department reported last week that orders to U.S. factories dropped in November for the third time in four months. The Institute for Supply Management reported that U.S. manufacturing contracted last month at the fastest pace in more than six years; it fell in November too.

American factories added just 30,000 jobs last year — the fewest since 2009. But overall employers added a solid 221,000 jobs a month last year and 284,000 a month from October through December.

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