Factory Production Rises for Fourth Time in Five Months
U.S. factory output increased in January for the fourth time in five months amid gains in machinery and chemicals, extending a gradual recovery in manufacturing.
Production at factories, which make up about 80% of all output, increased 0.2% in January from the previous month, a Federal Reserve report showed Feb. 15. That matched the median forecast in a Bloomberg News survey. Total industrial output, which includes mining and utilities, fell 0.3% as warm weather reduced demand for heating, with utility production falling the most in 11 years.
Healthy consumer spending and a recovery in the oil sector have supported recent gains in manufacturing, with a key gauge of industry rising in January to the highest since November 2014. At the same time, modest overseas demand, a strong U.S. dollar and soft investment in equipment from domestic firms have made for slow progress.
Estimates in the Bloomberg survey for manufacturing output, which accounts for about 12% of the economy, ranged from a decline of 0.1% to an increase of 0.6%. The December reading of a 0.2% gain was unrevised.
For total industrial production, the Bloomberg survey showed estimates ranging from a 0.6% drop to a rise of 0.4%, with a median projection for no change.
Capacity utilization, which measures the amount of a plant that is in use, declined to 75.3% in January from a revised 75.6% the prior month.
Utility output dropped 5.7%, the most since January 2006, after December’s 5.1% gain. Last month was the 18th-warmest January in the past 123 years, according to the National Oceanic and Atmospheric Administration.
Mining production, including oil drilling, expanded 2.8% in January after a 1.4% drop. Drilling of oil and gas wells jumped 8.5%.
U.S. rig counts increased to 741 in the week ended Feb. 10, the highest in more than a year, helped by increasing energy prices, Baker Hughes Inc. data show.
Machinery output rose 0.9%, while chemical production rose 1%. Consumer durable-goods output fell 0.9% in January on a 2.8% drop in automotive production. Business equipment production ticked up 0.1% after an 0.8% increase.
