U.S. manufacturing output surged in December likely as production at Boeing picked up following the end of a crippling strike by factory workers at the aerospace giant.

Factory output increased 0.6% last month after an upwardly revised 0.4% rebound in November, the Federal Reserve said on Friday. Economists polled by Reuters had forecast production rising 0.2% after a previously reported 0.2% gain.

Production at factories was unchanged on a year-on-year basis in December. It fell at a 1.2% annualized rate in the fourth quarter after contracting at a 0.8% pace in the July-September quarter. Manufacturing, which accounts for 10.3% of the economy, has largely stabilized in recent months after the U.S. central bank started cutting interest rates.

Employees work on solar panels at the QCells solar energy manufacturing factory in Dalton, Georgia, U.S. REUTERS/Megan Varner

The Institute for Supply Management's Purchasing Managers Index rose to a nine-month high in December. But broad tariffs on imported goods planned by President-elect Donald Trump's incoming administration could raise the costs of raw materials and undermine any recovery.

Production of aerospace and miscellaneous transportation equipment vaulted 6.3%. The strike by Boeing factory workers, which ended in November, had depressed overall manufacturing production in September and October.

Motor vehicle and parts output fell 0.6% last month. Durable manufacturing production rose 0.4%, also lifted by a 1.7% increase in primary metals output. Nondurable manufacturing output rose 0.7% amid broad gains.

Mining output advanced 1.8% after falling 0.5% in November.

Utilities production rose 2.1%, driven by a 6.2% increase in natural gas output amid freezing temperatures. That followed a 0.7% drop in November.

Industrial production accelerated 0.9% last month, with aircraft and parts output contributing 0.2 percentage point, after rising 0.2% in November. It increased 0.5% year-on-year in December and contracted at a 0.8% rate in the fourth quarter after shrinking at a 0.6% pace in the July-September quarter.

Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, rose to 77.6% from 77.0% in November. It is 2.1 percentage points below its 1972–2023 average. The operating rate for the manufacturing sector picked up 0.4 percentage point in December to 76.6. It is 1.7 percentage points below its long-run average.