With utilities output showing another substantial decrease, the Federal Reserve released a report on Friday showing that U.S. industrial production fell by more than expected in the month of December.

The report said industrial production dropped by 0.4 percent in December after slumping by a revised 0.9 percent in November.

Economists had expected production to dip by 0.2 percent compared to the 0.6 percent decrease originally reported for the previous month.

The sharp drop in utilities output contributed to the bigger than expected decrease in production, with utilities output tumbling by 2.0 percent in December after plummeting by 5.0 percent.

The Fed said the continued decrease in utilities output came as warmer-than-usual temperatures reduced demand for heating.

Mining output also fell by 0.8 percent in December after plunging by 2.1 percent in November, while manufacturing output edged down by 0.1 percent for the second straight month.

The report also said capacity utilization for the industrial sector fell to 76.5 percent in December from a downwardly revised 76.9 in November.

Economists had expected capacity utilization to edge down to 76.9 percent from 77.0 percent originally reported for the previous month.

Capacity utilization in the utilities sector dropped to 73.2 percent, while capacity utilization in the mining and manufacturing sectors edged down to 78.4 percent and 76.0 percent, respectively.

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