Factory Production in U.S. Rises for Fourth Time in Five Monthsby
U.S. factory output increased 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 percent of all output, increased 0.2 percent in January from the previous month, a Federal Reserve report showed Wednesday. That matched the median forecast in a Bloomberg survey. Total industrial output, which includes mining and utilities, fell 0.3 percent 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 last month 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 percent of the economy, ranged from a decline of 0.1 percent to an increase of 0.6 percent. The previous month’s reading of a 0.2 percent gain was unrevised.
For total industrial production, the Bloomberg survey showed estimates ranging from a 0.6 percent drop to a rise of 0.4 percent, with a median projection for no change.
Capacity utilization, which measures the amount of a plant that is in use, declined to 75.3 percent in January from a revised 75.6 percent the prior month.
Utility output dropped 5.7 percent, the most since January 2006, after December’s 5.1 percent gain. Last month was the 18th-warmest January in the last 123 years, according to the National Oceanic and Atmospheric Administration.
Mining production, including oil drilling, expanded 2.8 percent in January after a 1.4 percent drop. Drilling of oil and gas wells jumped 8.5 percent.
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 percent, while chemical production rose 1 percent. Consumer durable-goods output fell 0.9 percent last month on a 2.8 percent drop in automotive production. Business equipment production ticked up 0.1 percent following a 0.8 percent increase.