Output at U.S. Manufacturers Was Unchanged for Second Month

(Bloomberg) -- U.S. factory output was unchanged in January for a second month after a run of healthy advances consistent with ongoing expansion in the industry, Federal Reserve data showed Thursday.

Key Takeaways

The soft results for factory production, which may have been impacted by harsh weather in some parts of the U.S., reflected a 1.4 percent slump in the output of construction materials that was the biggest decline since December 2013. In contrast, production of business equipment and consumer goods increased.

While total industrial production was weighed down by a second consecutive decline in mining output, strength in the oil-and- gas industry helped push the mining index up 8.8 percent from a year ago.

Other reports indicate manufacturing remains on solid ground. The Institute for Supply Management’s index showed factories expanded more than forecast in January and near the fastest pace in more than 13 years.

Lower taxes and a pickup in overseas markets are spurring business investment. Steady hiring, rising home equity and elevated confidence also indicate sustained demand from consumers, which will boost sales of durable goods.

The Fed’s monthly data are volatile and often get revised. Manufacturing, which makes up 75 percent of total industrial production, accounts for about 12 percent of the U.S. economy.

Other Details

• Utility output rose 0.6 percent after surging 4.6 percent the prior month
• Mining dropped 1 percent after a 0.4 percent decline
• Production of consumer goods rose 0.3 percent, and output of business equipment jumped 0.9 percent
• Motor-vehicle and parts production 0.6 percent after a 1.1 percent gain

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