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Gain Biggest in 5 Months

January 15, 1985

WASHINGTON (AP) _ Production at the nation’s factories, mines and utilities rose a healthy 0.6 percent in December, the biggest increase in five months, the government reported today.

The report by the Federal Reserve Board said the increases were widespread among major industries. The December gain bettered a 0.4 percent rise in November, which had come after declines of 0.3 percent in October and 0.6 percent in September.

The two monthly declines had broken a string of 21 consecutive increases as the country pulled out of the 1981-82 recession. The declines pointed up the severity of the economic slump that occurred in late summer and early fall.

The economy had grown at a robust pace of 8.6 percent from January through June. However, growth in the third quarter plummeted to a meager 1.6 percent rate.

Today’s report on industrial production was the latest in a series of signals that economic growth rebounded in the last two months of the year. The December gain was the strongest since a 0.9 percent rise in July.

The report said that auto production was up 2.6 percent in December following an even stronger 12.4 percent increase in November. Auto manufacturing had slumped 9.8 percent in September, partly as a result of a brief strike against General Motors Corp. plants.

The December gain put the annual rate of auto assemblies at 8.1 million units, up from the November rate of 7.9 million units.

The production of all consumer goods was up 0.6 percent in December with durable consumer goods, such as autos, rising 0.8 percent, and the production of nondurable goods up a smaller 0.5 percent.

Production of defense and space equipment was up 0.9 percent in December following a 0.5 percent November gain.

By industry groups, manufacturing plants increased production 0.6 percent in December. That compared to a 0.4 percent November gain and was the strongest monthly increase since a 1 percent gain in July.

Production at the nation’s mines rose 1 percent in December following a 1.3 percent November gain and a 3.8 percent October drop.

Utilities were the only major group to show a decline in December, dropping 0.9 percent, primarily because of reduced electricity generation.

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