The Federal Reserve reported Tuesday that US industrial production rose 0.6 percent in December as the rate of factory use hit a five-year high. The gain was stronger than the average 0.5 percent expected on Wall Street.
Capacity utilization, an indication of slack in the industrial sector, soared to 80.7 percent, the highest since October 2000.
Analysts said the increase in capacity utilization may prompt concerns on the Fed’s rate-setting Open Market Committee, which warned in December that decreasing slack in the economy could fuel inflationary pressures.
A similarly solid picture emerged from the Empire State survey on manufacturing in the New York region in January.
While manufacturing activity in the New York area expanded at a slightly slower pace than expected, analysts said details of the report suggested greater strength than intimated by the decline in the headline index, with price pressures remaining elevated and new orders holding steady.