By Sarah Chaney
U.S. industrial output fell in January, driven down by unseasonably warm temperatures and a halt in production at Boeing Co.
Industrial production, a measure of factory, mining and utility output, decreased a seasonally adjusted 0.3% in January from the prior month, the Federal Reserve said Friday.
Utility production dropped 4% last month, with electric and natural-gas utilities falling 3.2% and 7.7%, respectively, as Americans cut back on their energy consumption during a warmer-than-usual January.
Boeing's woes also held down industrial output. The aircraft company halted production of the 737 MAX jet in January, leading to a 7.4% decrease in aerospace production and a 0.1% decline in overall manufacturing output last month. For the year through January, manufacturing production was down 0.8%.
Still, excluding the production of aircraft and parts, factory output was up 0.3% in January, offering signs of a turnaround after a weak 2019 for manufacturing production.
"That non-aircraft gain echoes the message from the recent manufacturing surveys that underlying conditions in the sector are starting to improve, " said Andrew Hunter, U.S. economist at Capital Economics, in a note to clients.
The Institute for Supply Management said its index of manufacturing activity rose 3.1 percentage points to 50.9 in January from December, indicating a return to growth for the first time since July. Global manufacturing activity is flashing signs of stabilization, though the coronavirus outbreak remains a wild card.
The U.S. is a service-oriented economy, meaning manufacturing accounts for a small share of overall gross domestic product. Still, the sector is highly sensitive to swings in global demand, making it an important indicator of broader economic shifts.
U.S. economic growth expanded at a moderate pace last year. While consumer spending has been strong, business investment and trade have been on shaky footing.
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(END) Dow Jones Newswires
February 14, 2020 13:03 ET (18:03 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.