U.S. Industrial Production Climbs More Than Expected As Utilities Output Spikes

RTTNews | 143 days ago
U.S. Industrial Production Climbs More Than Expected As Utilities Output Spikes

(RTTNews) - A report released by the Federal Reserve on Friday showed industrial production in the U.S. increased by more than expected in the month of January.

The Fed said industrial production climbed by 0.5 percent in January after jumping by an upwardly revised 1.0 percent in December.

Economists had expected industrial production to rise by 0.3 percent compared to the 0.9 percent advance originally reported for the previous month.

The bigger than expected increase by industrial production reflected a 7.2 percent spike by utilities output, as cold temperatures boosted the demand for heating.

Meanwhile, the Fed said mining output slumped by 1.2 percent and manufacturing output edged down by 0.1 percent amid a 5.2 percent plunge by motor vehicles and parts production.

"The industrial production report was choppy in January with obvious weather effects boosting utilities demand and weighing on mining and manufacturing," said Bill Adams, Chief Economist for Comerica Bank. "These short-term fluctuations will fade quickly."

"2025 will likely mark a better year for manufacturing output after declines in 2023 and 2024," he added. "Manufacturing business surveys show many of the industry's leaders think they have more to gain than lose from protectionist economic policies."

The report also said capacity utilization in the industrial sector rose to 77.8 percent In January from a downwardly revised 77.5 percent in December.

Economists had expected capacity utilization to inch up to 77.7 percent from the 77.6 percent originally reported for the previous month.

Capacity utilization in the utilities sector surged to 75.7 percent, while capacity utilization in the mining and manufacturing sectors dipped to 89.5 percent and 76.3 percent, respectively.

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