US industrial output up in December as PPI falls

There was more good news on the US economic front on Friday, with industrial output growing last month while producer prices fell.

The Federal Reserve reported that output from US factories, mines and utilities rose 0.8 percent in December, more than analysts had expected. This helped output for the whole of 2004 to increase by 4.1 percent, the best annual showing in four years.

Manufacturing output rose 0.7 percent, utilities output rose 2.7 percent, while mining output climbed 0.4 percent.

Capacity utilisation hit 79.2 percent in December, the highest since January 2001.

On the same day, the US Labor Department reported that producer prices fell 0.7 percent in December. This is the biggest decline since April 2003. Excluding food and energy, producer prices rose 0.1 percent.

However, for the year as a whole, producer prices rose a steep 4.1 percent as oil prices jumped. It was the biggest calendar year gain since an oil price spike in 1990.

January producer prices may see further gains, after US crude oil futures rose to a six-week high of US$48.5 on Friday.