Industrial production in the U.S. increased 0.9 percent in January, according to the Federal Reserve. A storm late in the month likely held down production in January by a small amount.
Manufacturing output increased 0.5 percent in January and was up 1.2 percent year over year. The index for utilities increased 5.4 percent, as demand for heating moved up markedly after having been suppressed by unseasonably warm weather in December. Mining production was unchanged following four months with declines.
At 106.8 percent of its 2012 average, total industrial production in January was 0.7 percent below its year-earlier level.
Capacity utilization for the industrial sector increased 0.7 percentage points in January to 77.1 percent, a rate that is 2.9 percentage points below its long-run (1972-2015) average.
"The January report shows that the manufacturing sector is able to grow amid the turmoil in emerging economies and the energy market collapse," said Daniel Meckstroth, chief economist for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation. "January manufacturing production was up in 9 of the 20 major manufacturing industries. The strongest growth occurred in large industries such as chemicals, motor vehicles and parts, and food. The major driver of manufacturing growth is consumer spending for basics and durable goods. Consumers are expanding their purchases of motor vehicles, which benefits the automotive supply chain and the population is forming new households at a faster rate, which propels the robust housing market. The improvement in residential construction drives community development in the form of commercial construction. Infrastructure needs have led to a modest pace of public works construction expansion."
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