The increase was the largest since July and followed a downward revision in November's output growth to 0.3 per cent from an originally reported 0.4 per cent gain.
Utility output in December rose 4.3 per cent over November, while manufacturing and mining output each rose 0.4 per cent.
Capacity use, a measure of how fully firms are using their resources, rose to 76 per cent – the highest since July 2008 – from an upwardly revised 75.4 per cent in November.
However, capacity use remains well below its long-run average.
Further good news on the US’s growing industrial recovery was a slower-than-expected rise in the level of stock US businesses kept in November.
Strong sales meant business inventories advanced just 0.2 per cent to a total value of $1.42trn, the Commerce Department said.
Inventory accumulation has been expected to slow in the coming quarters as sales power output.
Business sales rose by 1.2 per cent in November to $1.13trn, the highest since September 2008, one of the most turbulent periods of the financial crisis. Sales rose 1.5 per cent in October.
The sales pace pulled down the inventory-to-sales ratio, which measures how long it would take to clear shelves at the current sales pace, to 1.25 months from 1.27 months in October.