Industrial production falls slightly in January
Wednesday, February 15th 2006, 8:38 am
By: News On 6
WASHINGTON (AP) _ A record plunge in output at the nation's utilities due to unusually warm weather in January led to a small decline in industrial production in January.
The Federal Reserve reported Wednesday that industrial output fell by a slight 0.2 percent last month following strong gains of 0.9 percent in December and 1.1 percent in November. It was the first decline since a huge 1.3 percent fall in September that reflected the widespread disruption along the Gulf Coast following Hurricane Katrina.
The weakness last month reflected a record 10.1 percent drop in production at utilities, the result of lower demand for electricity and natural gas amid unusually mild weather in January. However, output in manufacturing rose by a solid 0.7 percent last month.
The increase in manufacturing output was better than expected and pushed the operating rate at the nation's factories to 80.5 percent of capacity, the highest level since July 2000. The strength came in big gains in production at factories making electrical equipment, appliances and motor vehicles.
Output at the nation's mines, a category that includes oil and gas drilling, rose a strong 1.7 percent in January following even bigger increases of 2.8 percent in December and 5.4 percent in November. Those gains reflected efforts to bring back oil and natural gas production along the Gulf Coast back on line following the hurricanes.
Overall, the nation's factories, mines and utilities operated at 80.9 percent of capacity last month, down slightly from an operating rate of 81.2 percent in December, reflecting the drop-off in utility production.
The U.S. economy slowed to overall growth of just 1.1 percent in the final three months of last year, the slowest pace in three years. However, economists are looking for a significant rebound in the current three months.
Some analysts said the economy may be expanding at a rate of 5 percent or more in the current quarter, given recent reports showing sizable gains in employment and retail sales.