February 19, 2018
Economy Watch: Monthly Industrial Output Slips Slightly
Total industrial production in the U.S. was 3.7% higher in January than a year earlier, but was down 0.1% from December 2017 – a month-to-month decline that occurred after four consecutive months of increases.
The recently released findings come from the Federal Reserve, which said that January’s manufacturing output was unchanged compared to the prior month, while mining production fell 1%. Utilities output rose 0.6%, the Fed said.
Manufacturing, mining and utilities comprise total industrial production in the Federal Reserve’s monthly analysis. Manufacturing, which makes up about 75% of industrial production, accounts for about 12% of the U.S. economy.
Within the manufacturing sector, factories put out more cars and computers in January, but production of wood products and aircraft declined. Also, there was a 1.4% slip in the production of construction materials – the steepest monthly drop since December 2013.
Weather might have been a factor in the manufacturing sector’s performance in January. Economists don’t expect the setbacks or stagnation to last.
“Manufacturing was impaired by severe inclement weather in parts of the country at the beginning of the month,” said Carl Riccadonna and Yelena Shulyatyeva of Bloomberg Economics. “Fast-forward the weather impact, industrial output is estimated to pick up this year, supported by the tax reforms and a more optimistic economic outlook in general, which in turn will further increase capacity constraints and support business investment growth this year.”
Should that forecast come to fruition, it would continue the positive momentum of 2017, a year in which manufacturers expanded production and added nearly 200,000 jobs.