For the second straight month in January, the U.S. factory output has stayed flat. This caused concerns to rise, questioning the manufacturing outlook as production declined in the aerospace, plastics, and food industries.
The Federal Reserve reported on Thursday that there was a lack of growth in the U.S. manufacturing sector. This confounded analysts’ expectations of a 0.3 percent monthly increase. The Fed previously estimated a small increase in output for December before revising the data to show that there were no gains that month.
Overall, the industrial production inched lower by 0.1 percent in January due to a 1.0 percent drop in mining output. Utilities output was up 0.6 percent the month before.
Strengthening global economy boosted the industrial sector over the past year.
Manufacturing output was held back last month by output declines of 0.2 percent at aerospace factories. The 0.5 percent drop from those producing plastics and a 0.4 percent drop in food industries also dragged down the manufacturing output.
A slight rise was seen for overall output of goods made to last at least six months. Gains were observed in production of primary metals, computers, and motor vehicles.
Capacity utilization, used to measure how fully industries are deploying their resources, dropped to 77.5 percent.
US Producer Price Index in January Meets Predictions
Meanwhile, the U.S. producer prices for January accelerated, boosted by strong gains in the cost of gasoline and health care. This stands to show that inflation pressures were building up.
The Labor Department released a statement on Thursday. According to them, its producer price index for final demand rose 0.4 percent last month after staying unchanged in December.
During the past 12 months through January, the PPI increased 2.7 percent, the largest increase since August 2014. Economists predicted that the PPI will rise 0.4 percent last month and up 2.5 percent from a year ago.
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