After a dip in December, U.S. industry increased its output by 0.2% in January, the Federal Reserve reported today. Industrial production had fallen by 0.3% in December.
Manufacturing output also rose 0.2% in January, the bank announced, with durable goods output advancing 0.4% and nondurable goods unchanged. Production increases of more than 1.0% were recorded by the primary metals and computer and electronic products sectors. However, production was off in the major components of motor vehicles, aerospace and furniture.
Capacity utilization in the nation’s factories increased to 78.1% in January, but remained 0.5% below the long-run average.
Mining fell 1.0% in January, due to a substantial drop in oil and gas well drilling and supporting activities, the bank noted. The output of utilities grew by 2.3% in January.
Compared to the same period a year ago, total industrial production in January was up 4.8%, while manufacturing increased 5.6% and mining was up 8.5%. Utilities fell 6.6% compared to January 2014.
For the fourth quarter of 2014, the Federal Reserve reported, industrial production grew at an annual rate of 4.3%. This occurred despite the bank revising production down for each of the last three months of the year.
“Despite the relatively slow growth in January, we are optimistic about the state of manufacturing,” said Daniel J. Meckstroth, chief economist for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation. “Sentiment indicators, including the Purchasing Managers Index, imply moderate production growth and the continued gains in manufacturing jobs show that firms have orders and need to expand. Lower energy prices have decreased costs and will boost consumer spending."
Meckstroth said the main concern for U.S. manufacturing remains foreign trade. "The sudden appreciation of the dollar reflects the weakness abroad and will worsen the trade deficit in manufacturing. Nevertheless, we believe manufacturing production will continue to accelerate and grow faster than the general economy.”