Home / Business / Industrial production in the US fell in January for the first time in eight months

Industrial production in the US fell in January for the first time in eight months

Bloomberg News / Landov

A launchboat 27 at Winnebago Industries Inc.'s Chris-Craft manufacturing facility in Sarasota, Florida.

The figures: Industrial production fell 0.6% in January, the first decline In eight months, the Federal Reserve announced on Friday. The decline was below Wall Street expectations for a flat value.

In addition to a sense of weakness in the report, industrial production in December was reduced to a gain of 0.1

% from the original estimate of 0.3%.

Despite After the decline, production in January remains 3.8% higher than a year ago.

Capacity utilization declined by 0.6 percentage points to 78.2% in January, its lowest level since July last year.

What happened: In January, all categories went down except for mining and utilities production. The manufacturing sector alone fell by 0.9%, led by a slump in the volatile motor vehicle sector. Cars fell 8.8% in January. Without cars, the factory output fell by 0.2%.

Mining production increased by 0.1% in January. The performance of utilities rose by 0.4%.

Large image: Economists did not believe that the solid industry report would be repeated for December in January, but not many claimed the overall weakness of the data. This could be the turning point for the manufacturing sector, but the separate ISM index for industrial production was stronger in January than in December.

The manufacturing sector faces a headwind due to the slowdown in global growth, tensions in the trade and strong dollar. The forward-looking Empire State Index was moderately positive.

What do you say? "The manufacturing sector is under real pressure from the slowdown in China and the trade war. We expect output to drift lower in the first half of the year, leading to a slight recession in the sector. This will not kill the rest of the economy, but it will not look good, and by the time the sector reaches its low point in late spring, the Fed's recent flagging turn will look like the right move, "said Ian Shepherdson. Chief Economist at Pantheon Macroeconomics.

Market Reaction: The Dow Jones Industrial Average

DJIA, + 1.25%

rose more than 350 points on Friday as US-China trade talks reportedly progressed.

Related : The index of the Empire State Manufacturing Index recovers slightly in February

Source link