Despite expected weather problems, the U.S. industrial sector bounced back sharply in February after January’s drop, according data from the Federal Reserve.
U.S. industrial production increased 0.6% in February, an increase from January’s revised drop of 0.2%. According to media reports, economists were forecasting an increase of between 0.1% and 0.2%.
” In February, manufacturing output rose 0.8 percent and nearly reversed its decline of 0.9 percent in January, which resulted, in part, from extreme weather. The gain in factory production in February was the largest since last August.,” the Federal Reserve said.
With in the manufacturing sector, the Federal reserve said in its report, “Much of the swing in the rates of change for production in January and February reflected the depressing effects on output of the severe weather in January and the subsequent return to more normal levels of production in February.”
At the same time, the Federal Reserve reported an increase in the capacity utilization rate of 78.8.% for February, up from January’s reading of 78.5%. Economists were expecting to see only a mild increase in inflation pressure and forecasted a reading around 78.7%.
In the report, the Fed said that the capacity utilization reate was 1.3 percentage points below its long-run average.
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