US Industrial Production Fell in January

U.S. industrial production fell in January as unseasonably warm weather caused a major drop in utilities output, offsetting gains in manufacturing and mining, the Federal Reserve said on Wednesday.

The U.S. central bank said its overall industrial production index fell 0.3 percent last month after a downwardly revised 0.6 percent gain in December.

Economists polled by Reuters had forecast industrial production being flat in January. December’s output was originally reported as a 0.8 percent rise. The Fed’s measure of the industrial sector comprises manufacturing, mining, and electric and gas utilities.

The bulk of the January decline was due to a 5.7 percent drop in utilities output because of reduced heating demand. Manufacturing production was up 0.2 percent, matching analysts’ forecasts, while mining output rose 2.8 percent.

With overall output declining in January, the percentage of industrial capacity in use fell 0.3 percentage point during the month to 75.3 percent. Manufacturing capacity use rose 0.1 percentage point to 75.1 percent.

Fed officials look to capacity use as a signal for how much further the economy can accelerate before sparking higher inflation.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza