US Industrial Output Rises More than Expected

US industrial production increased by 1.1 percent month-over-month in February 2018, following an upwardly revised 0.3 percent drop in January and easily beating market expectations of a 0.3 percent gain. Manufacturing production increased the most since October and mining output rebounded sharply, while utilities shrank.

Manufacturing production increased 1.2 percent in February, its largest gain since October, recovering from a 0.2 percent fall in the previous month. Durable manufacturing went up 1.8 percent (vs -0.4 percent in January), as output rose for motor vehicles and parts (3.9 percent vs -0.2 percent), fabricated metal products (1.6 percent vs 0.4 percent), computer and electronic products (1.5 percent vs 0.7 percent) and machinery (0.5 percent vs -2.2 percent). Also, nondurable manufacturing grew 0.7 percent after showing no growth in January. Food, beverage, and tobacco products output increased 1.7 percent (vs 0.5 percent in January) and chemicals production advanced 0.6 percent (vs 0.4 percent in January).

Mining output jumped 4.3 percent, rebounding from a 1.5 percent contraction in January, mostly reflecting strong gains in oil and gas extraction. 

The index for utilities fell 4.7 percent, compared to a 1.3 percent growth in the previous month, as warmer-than-normal temperatures last month reduced the demand for heating. Output fell for both natural gas (-13.8 percent vs -4.7 percent) and electric (-3.3 percent vs 2.2 percent).

Capacity utilization for the industrial sector climbed 0.7 percentage point in February to 78.1 percent, its highest reading since January 2015 but still 1.7 percentage points below its long-run (1972–2017) average.

US Industrial Output Rises More than Expected

Federal Reserve | Joana Ferreira |
3/16/2018 1:26:43 PM