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According to the Federal Reserve, U.S. industrial production fell 0.3% in January as “unseasonably warm weather held down the output of utilities and as a major manufacturer significantly slowed production of civilian aircraft.”
“The major market groups posted mixed results in January,” The Fed reported. “The output of business equipment declined 2.6 percent as a result of the slowdown in the production of aircraft. The step-down in the index for utilities contributed to decreases for consumer energy products and energy materials. The index for consumer durables rose, supported by an increase of 2.8 percent in the output of automotive products.”
Manufacturing production dropped 0.1%; however, production increased 0.3% when excluding the decline in production of aircraft and parts.
“The production of durable goods moved down 0.5 percent in January, as drops for aerospace and miscellaneous transportation equipment and for machinery were partially offset by a gain for motor vehicles and parts,” The Fed said. “The output of nondurable manufacturing rose 0.3 percent, and almost all of its component categories posted gains. The indexes for petroleum and coal products and for plastics and rubber products recorded increases of more than 1 percent, whereas only the index for apparel and leather recorded a decrease of more than 1 percent.”
Mining, however, outperformed its peers, jumping 1.2%. Mining output was also up 3.1% from the previous year. Utilities output dropped 4.0% in January, while electric and natural gas utilities output fell 3.2% and 7.7%, respectively.
On a year-over-year basis, industrial production in January was down 0.8% from the previous year, reaching 109.2% of its 2012 average, according to the Fed.
The industrial sector’s capacity utilization rate fell 0.3 percentage point to 76.8%, which marked a 3.0-percentage point decline from its long-run average (i.e., from 1972-2019).