US Industrial Output Rebound Weaker than Expected

US industrial output edged up 0.1 percent from a month earlier in February 2019, following a revised 0.4 percent fall in January and missing market expectations of a 0.4 percent gain. Utilities and mining output supported growth, while manufacturing production fell for the second consecutive month.

The output of utilities rose 3.7 percent in February (vs -0.9 percent in January), as the output of electric utilities rebounded from decreases in the previous two months. Mining output moved up 0.3 percent for its 13th consecutive monthly increase.

Manufacturing output decreased 0.4 percent in February after falling 0.5 percent in January, also missing market consensus of 0.3 percent growth. The output of durables edged down 0.1 percent (vs -1.2 percent in January) due to declines in production of nonmetallic mineral products (-2.1 percent vs 0.1 percent), machinery (-1.9 percent vs 0.2 percent), and furniture and related products (-1.5 percent vs 0.9 percent), while gains were registered by computer and electronics products (1.4 percent vs -0.2 percent), aerospace and miscellaneous transportation equipment (1.1 percent vs 1.2 percent), and miscellaneous manufacturing (1.1 percent vs unchanged). In addition, nondurable goods production fell 0.7 percent (vs 0.3 percent in January), as most major nondurable goods industries posted decreases, in particular petroleum and coal products (-5.2 percent vs 2.9 percent), apparel and leather (-1.8 percent vs -4 percent), and printing and support (-1.5 percent vs 0.3 percent). The only increases were recorded by paper (0.7 percent vs -0.8 percent) and food, beverage, and tobacco products (0.3 percent vs 0.7 percent). Production of other manufacturing (publishing and logging) increased 0.5 percent but remained well below its year-earlier level.

Capacity utilization for the industrial sector edged down 0.1 percentage point in February to 78.2 percent, a rate that is 1.6 percentage points below its long-run (1972–2018) average. Capacity utilization for manufacturing declined 0.4 percentage point in February to 75.4 percent, almost 3 percentage points below its long-run average, with losses for durables and for nondurables but a gain for other manufacturing (publishing and logging). The utilization rate for mining decreased to 94.6 percent but remained well above its long-run average of 87.1 percent. The rate for utilities jumped to 78.6 percent, but it was still nearly 7 percentage points below its long-run average.

US Industrial Output Rebound Weaker than Expected

Federal Reserve | Joana Ferreira |
3/15/2019 1:32:06 PM