Monthly February U.S. Industrial Production Edged Up 0.1%

February U.S. industrial production was relatively weak for a third straight month, according to Federal Reserve data released Jan. 15.

The Fed’s latest Industrial Production and Capacity Utilization report showed that industrial production edged up 0.1% in February after declining 0.5% in January. January’s figure was revised from down from -0.1% in an initial estimate.

Year-over-year, February’s industrial production was down 0.2%.

The report’s February index for manufacturing output rose 0.8% (-1.1% in Jan.) and the index for mining climbed 2.2% (-2.9% in Jan.). Both gains partly reflected recoveries from weather-related January declines, the Fed noted. Meanwhile, the February index for utilities fell 7.5% in February because of warmer-than-typical temperatures.

At 102.3% of its 2017 average, total February industrial production was down 0.2% year-over-year. Capacity utilization for the industrial sector remained at 78.3% in February — down 1.3 percentage points from its long-run (1972-2023) average.

Market Groups

The output of most major market groups moved up in February. An exception is the index for consumer goods, which declined 1.4%, driven almost entirely by a utilities-related decrease of 8.6 percent in the index for consumer energy. Elsewhere in consumer goods, the indexes for non-energy nondurables and durables rose 0.6 and 0.9%, respectively. Similarly, within materials, all market groups posted gains except energy materials, the output of which fell 0.2%. All other market groups also recorded increases, led by construction supplies and business equipment, the output of which increased 1.9 and 1.7%, respectively.

Industry Groups

Manufacturing output stepped up 0.8 %in February after declining 1.1 %in January. In February, durable manufacturing posted a gain of 1%, and the index for nondurable output increased 0.7%. The output of other manufacturing (publishing and logging) inched down 0.1%. Among durables, notable increases were recorded in wood products (2.4%), miscellaneous manufacturing (2.3%), and motor vehicles and parts (1.8%). Nondurables also experienced widespread growth, with the largest increases in the output of chemicals (1.6 percent), printing and support (1.5%), and paper (1.1%).

Mining output climbed 2.2 percent in February after falling 2.9% in January. The output of utilities, however, dropped 7.5% in February as the indexes for electric and natural gas utilities decreased 6.5 and 13%, respectively.

Capacity utilization for manufacturing increased 0.6 percentage point to 77 percent in February, a rate that is 1.2 percentage points below its long-run average. The operating rate for mining moved up 2.1 percentage points to 93.8 percent, a rate that is 7.3 percentage points above its long-run average. The operating rate for utilities slid 5.7 percentage points to 67.8%, well below its long-run average of 84.4%.