With a steep drop in utilities output offsetting a jump in mining output, the Federal Reserve released a report on Friday showing that USA industrial production came in flat in the month of February.
The Federal Reserve said on Friday manufacturing production rose 0.5 percent last month. Output in the sector was up 0.5 percent in February, mirroring the gain seen in January. The increase in manufacturing last month matched the median forecast in the Bloomberg survey. The lower figure stemmed largely from a sharp decline in utilities output, down 5.7 percent, likely due to warmer-than-normal winter temperatures.
This followed a revised 0.1% decline in January, a bit faster than the original reading of a 0.3% decline. Utility production plunged 5.7% as unseasonably warm weather reduced the need for heating exceeding the 0.2% estimate by economists in a survey compiled by a Bloomberg survey of economists.
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The output of motor vehicles and parts rebounded 0.8 percent after a 0.8 percent decrease the previous month. Capacity utilization for the industrial sector declined 0.1 percentage point in February to 75.4%, a rate that is 4.5 percentage points below its long-run (1972-2016) average. Capacity at factories rose to 75.6 percent, the highest since October 2015. For comparison purposes, capacity utilization was 75.6 percent one year ago.
Gains in manufacturing were led by increases in the production of nonmetallic mineral products, fabricated metal products and machinery of over 1% in each case. Computers and electronic products output rose 0.7 percent last month. But with details of President Donald Trump's economic policy still vague, the jump in sentiment has not translated into strong business spending on equipment.