U.S. Manufacturing Output Rose by More Than Forecast in January
(Bloomberg) -- Production at U.S. manufacturers rose in January by more than forecast, a fourth-straight monthly advance that shows factories continue to recover from pandemic-related disruptions last year.
Output at factories increased 1% from the prior month after a 0.9% gain in December, according to Federal Reserve data Wednesday that compared with economists’ estimates for a 0.7% rise.
Total industrial production, which also includes mines and utilities, advanced 0.9% in January after a revised 1.3% increase a month earlier.
The Fed’s index of factory output is just 1.9% below its pre-pandemic level, a sign that factories are benefiting from lean inventories and steady demand. While supply chain disruptions and labor shortages continue to present challenges, these pandemic-related setbacks should dissipate as vaccinations pick up.
The gain in factory output was broad-based, with increases in production of consumer goods, business equipment, construction materials and non-durable products. Meanwhile, auto production dropped due to a shortage of semiconductors, the Fed said.
In a separate report Wednesday, retail sales surged in January by the most in seven months, beating all estimates and suggesting fresh stimulus checks helped spur a rebound in household demand following a weak fourth quarter.
- Manufacturing capacity utilization picked up to 74.6% from 73.9%, while total capacity utilization, including factories, mines and utilities, increased to 75.6% from 74.9%
- The overall plant-use rate is just below the pre-pandemic level of 76.9%. Unused capacity weighs on corporate profits
- Utility output declined 1.2% in January while mining output increased 2.3%
- Oil and gas well drilling increased 11.3% though remains more than 50% below year-ago levels
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