U.S. industrial output rose for the third month in a row in December as a recovery in production from damaged Gulf Coast oil and gas wells offset a slump in auto manufacturing.

The U.S. Federal Reserve said production at factories, mines and utilities rose by 0.6% last month following gains of 0.8% in November and one% in October.

The consecutive monthly increases offset the 1.3% plunge in September after hurricane Katrina caused widespread damage to oil wells, refineries and chemical production along the Gulf Coast.

Manufacturing output also edged up last month, by a modest 0.2%, following a 0.4% gain in November. That reflected a drop in production of autos and auto parts for the third straight month as automakers scaled back output in an effort to reduce the inventory of unsold cars.

Manufacturing was the hardest-hit sector in the 2001 recession. It is expected to recover in 2006 as Europe and Japan boost demand for U.S. exports.