Industrial Production Increases For Seventh Straight Month

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Industrial production increased for the seventh consecutive month in January, according to a report released by the Federal Reserve on Wednesday, with the pace of growth during the month exceeding economist estimates.

The report showed that industrial production increased by 0.9 percent in January following an upwardly revised 0.7 percent increase in December. Economists had been expecting production to increase by 0.7 percent compared to the 0.6 percent growth originally reported for the previous month.

Christoph Balz, an economist at Commerzbank, said, "We had expected a smaller increase as a normalization of the weather should have dampened energy production."

A jump in manufacturing production contributed to the bigger than expected increase, with output from the manufacturing sector increasing by 1.0 percent in January after edging down by 0.1 percent in the previous month.

Balz said the increase in manufacturing output "is a signal that the V-shaped recovery of this sector has not run its course so far."

The Federal Reserve said that the growth in manufacturing production reflected increases for most of its major components, including a 4.9 percent jump in the production of motor vehicles and parts.

Utilities output increased by a more modest 0.7 percent in January after surging up by 6.3 percent in December, while mining output rose by 0.7 percent in January after edging down by 0.2 percent in the previous month.

Additionally, the Federal Reserve said that the capacity utilization rate rose to 72.6 percent in January from a revised 71.9 percent in December. The increase in the capacity utilization rate came in line with economist estimates.

Capacity utilization in the manufacturing sector rose to 69.2 percent in January from 68.4 percent in December, while capacity utilization in the mining and utilities sectors rose to 86.2 percent and 83.1 percent, respectively.

Based on the data, Balz said, "While the U.S. economy is still likely to lose some speed after its stellar performance in Q4 (5.7% annualized growth), the slow-down could be less noticeable than previously expected."

Industrial production increased for the seventh consecutive month in January, according to a report released by the Federal Reserve on Wednesday, with the pace of growth during the month exceeding economist estimates. The report showed that industrial production increased by 0.9 percent in January following an upwardly revised 0.7 percent increase in December. Economists had been expecting production to increase by 0.7 percent. (Market News Provided by RTTNews)