Industrial Output Spurts .7%, Best Gain in 4 Months

Production at the nation’s factories, mines and utilities rose a sharp 0.7% in December, the biggest gain in four months, the government reported today.

The Federal Reserve Board report not only showed strength for December but also revised upward the earlier estimate for industrial production in November.

Instead of the original 0.4% gain, the government said production rose by 0.6% in November following a 0.6% drop in October. It was the best showing for the nation’s industries since a 0.9% rise in August.

The two strong monthly gains gave encouragement to the Reagan Administration and to economists who believe that the economy is in the midst of a sharp revival following a yearlong slump in activity.

Beryl Sprinkel, chairman of the President’s Council of Economic Advisers, said the increase in industrial production, coming on the heels of a report last week that employment rose sharply during December, provided further evidence that the economy is rebounding. He said it bolstered the Administration’s projection that growth next year will average 4%.

The increases in production were widespread among the various categories.

Manufacturing production shot up 0.8% with a 0.6% increase in production of durable goods, items expected to last three or more years, and an even stronger 1% advance for industries making non-durable goods.

The nation’s mines increased production by 0.3% in December, but this did little to erase a giant 1.6% drop in November. This category, which includes oil drilling activities, has been in a slump because of the drop in petroleum exploration.