Industrial Production Falls 0.1%

Reuters

U.S. industrial output unexpectedly fell in January as a return to normal winter temperatures caused a sharp fall in utility output, while production from mines also fell, a Federal Reserve report showed on Wednesday.

Industrial production fell 0.1% in January after an upwardly revised 1.2% jump in December, which had been driven by unseasonably cold weather that spiked heating demand.

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The drop was the first decline in output since June 2009 and was well below the median forecast for a 0.5% increase in a Reuters poll of economists after December's originally reported 0.8% gain.

Utility output fell by 1.6% in January after a 4.1% leap in December, while mining output fell 0.7%.

Manufacturing output in January grew just 0.3% after an upwardly revised 0.9% gain in December.

Capacity use, a measure of how fully firms are using their resources, dipped to 76.1% from an upwardly revised 76.2%. Economists polled by Reuters had predicted a 76.3% capacity use rate.

Officials at the Fed tend to look at utilization measures as a signal of how much "slack" remains in the economy—how far growth has room to run before it becomes inflationary.

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