U.S. factory output up after winter decline

March 17
ECONOMY
Factory output up after winter chill

Factories heated up last month, unexpectedly posting their biggest output gains since last summer and helping overall industrial production reverse a weather-related January decline, the Federal Reserve said Monday.

Manufacturing output surged 0.8 percent in February, after a 0.9 percent drop the previous month that the Fed said resulted from extreme winter weather that hit much of the country.

The jump was the largest since August and exceeded analyst expectations for a 0.3 percent increase. Auto factories were a big factor in the rise, with output of motor vehicles and parts increasing 4.8 percent last month after dropping 5.2 percent in January.

The report was another indication that economic growth was picking up again after being stalled by bitter cold and snow this winter. The Fed said much of the big swing in output reflected the effect of the weather, with production rates returning to “more normal levels” last month.

Factories are a major component of industrial production, which includes output from mines and power plants. That overall production also rose sharply, up 0.6 percent last month after declining a revised 0.2 percent in January. Economists had projected a 0.3 percent increase in February.

Output from electric and gas utilities dropped 0.2 percent after a 3.8 percent increase in January “but remained elevated because of the strong demand for heating due to the unusually cold weather,” the Fed said.

— Los Angeles Times

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Coming Today

8:30 a.m.: Housing starts, consumer price index for February.

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