Output at Manufacturers Was Unchanged for Second Month
U.S. factory output was unchanged in January for a second month after a run of healthy advances consistent with ongoing expansion in the industry, Federal Reserve data showed Feb. 15.
Highlights of Industrial Production for January
• Factory output compares with est. 0.3% gain; prior month revised down from 0.1% gain.
• Total industrial production, which also includes mines and utilities, eased 0.1% (estimated 0.2% rise) after a revised 0.4% gain (previously 0.9%); first decline in five months.
• Capacity utilization, measuring the amount of a plant that is in use, eased to 77.5% from 77.7%.
Key Takeaways
The soft results for factory production reflected a 1.4% slump in the output of construction materials. In contrast, production of business equipment and consumer goods increased.
While total industrial production was weighed down by a second consecutive decline in mining output, strength in the oil-and- gas industry helped push the mining index up 8.8% from a year ago.
Other reports indicate manufacturing remains on solid ground. The Institute for Supply Management’s index showed factories expanded more than forecast in January and near the fastest pace in more than 13 years.
Lower taxes and a pickup in overseas markets are spurring business investment. Steady hiring, rising home equity and elevated confidence also indicate sustained demand from consumers, which will boost sales of durable goods.
The Fed’s monthly data are volatile and often get revised. Manufacturing, which makes up 75% of total industrial production, accounts for about 12% of the U.S. economy.
Other Details
• Utility output rose 0.6% after surging 4.6% the prior month.
• Mining dropped 1% after a 0.4% decline.
• Production of consumer goods rose 0.3%, and output of business equipment jumped 0.9%.
• Motor-vehicle and parts production 0.6% after a 1.1% gain.
With assistance by Jordan Yadoo
