U.S. Industrial Output Barely Rises After Weather-Related Slump
US industrial production barely rose in February as milder weather damped utility demand but spurred a snapback in factory output.
(Bloomberg) -- US industrial production barely rose in February as milder weather damped utility demand but spurred a snapback in factory output.
The 0.1% advance in production at factories, mines and utilities followed a downwardly revised 0.5% drop a month earlier, Federal Reserve data showed Friday.
While manufacturing output jumped 0.8% last month, it followed a downwardly revised 1.1% decrease in January that the Fed said was due to harsh winter weather conditions.
The Fed’s report showed a 7.5% decrease in utility output, while mining production increased 2.2% after a weather-related slump in January.
Despite rising in February, factory output was down 0.7% from the same month a year ago, illustrating lingering malaise for the sector. Separate data out Friday showed manufacturing activity in New York state contracted this month by more than than expected as orders, shipments and employment weakened.
While factory customers have made progress over the past year getting stockpiles more in line with demand, government figures on Thursday showed retail sales rose modestly in February after a big pullback at the start of the year.
Read more: Retail Sales Miss Forecasts After Steep Drop in Prior Month
The decrease in January purchases produced the highest inventory-sales ratio at retailers since May 2020. A more restrained US consumer, in conjunction with tepid global demand, risks limiting factory production.
The rise in February manufacturing output reflected improvements in machinery, motor vehicles and electric equipment. Output of consumer goods, however, decreased 1.4% on a slump in energy demand. Production of business equipment increased 1.7%, the most in two years.
Capacity utilization at factories, a measure of potential output being used, rose to 77%. The overall industrial utilization rate was unchanged at 78.3%.
Earlier this month, the Institute for Supply Management’s broader measure of manufacturing across the US fell in February even as purchasing and supply management executives expressed confidence the industry is turning the corner.
--With assistance from Chris Middleton.
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