By Sharon Nunn and Josh Mitchell 
 

WASHINGTON--U.S. industrial output rose in December because of broad-based gains in the manufacturing and mining industries.

Industrial production, a measure of factory, mining and utility output, increased a seasonally adjusted 0.3% in December from the prior month, the Federal Reserve said Friday. Economists surveyed by The Wall Street Journal had expected a 0.2% gain for December.

From a year earlier, industrial production rose 4% in December.

Output at U.S. factories, which accounts for about 75% of the nation's total industrial output, grew 1.1% last month, the biggest gain since February. Within the industry, output rose broadly across production categories, including vehicles and car parts, appliances and clothing.

Mining output, which represents a smaller slice of overall production, increased 1.5% despite recent energy price volatility. Utility production, meanwhile, declined 6.3% from November, largely due to "warmer-than-usual temperatures," which "lowered the demand for heating," according to the Fed's report.

Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, rose by 0.1 percentage point to 78.7% in December. Capacity utilization has remained below long-run averages. Economists had expected utilization of 78.5%.

Manufacturing production has been rising since mid-2016, when rising oil prices helped reverse a hit to U.S. energy production. The recent upward trend could change soon, as energy prices have been falling.

The tax cuts passed in late 2017 were meant to spur demand for U.S.-made products, via business investment and larger paychecks for Americans. The government also ramped up its defense spending this year, buying more manufactured goods.

Still, a few other manufacturing reports published recently that were weaker, along with slowing global growth, trade disputes, market volatility, and the partial government shutdown, have unsettled investors. In response to economic and market uncertainties, Federal Reserve officials have said they will be patient before raising short-term interest rates again.

Write to Sharon Nunn at sharon.nunn@wsj.com and Josh Mitchell at josh.mitchell@wsj.com.

(END) Dow Jones Newswires

January 18, 2019 09:30 ET (14:30 GMT)