FXstreet.com (Barcelona) - US industrial production remained flat in December, against expectations of a slight drop, while the capacity utilization declined slightly, according to data release by the Federal Reserve.

Industrial production was unchanged was unchanged in December, while it decreased 1.0% on the fourth quarter, the first quarterly decrease since the fourth quarter of 2006. On the year, Industrial production rose 1.5%.

Ian Shepherdson Chief U.S. Economist at High Frequency Economics, Ltd affirms: It is hard to square the unchanged manufacturing production number with the drop in the ISM index, the fall in manufacturing hours worked and the decline in employment in the sector, but the numbers are what they are.

Capacity utilization decreased slightly to 81.4 in December from 81.6 n November, revised up from the initial 81.5.

Output in the manufacturing sector was unchanged in December, while the output on utilities decreased 0.2% due to a decline n gas utilities, and output of mines edged up 0.1% after a 1.0% increase on the previous month.

According to Shepherdson production will fall slowly in the first quarter: A 0.5% drop in auto output was offset by a rise in computer production; production of home electronic equipment and construction supply - surprise! - fell. Looking forward, we fully expect output to fall at a moderate pace in the first half; the absence of an inventory problem in most sectors means there should be no need for aggressive cutbacks in production.