U.S. Industrial Production Disappoints in January
- IP +0.03% in Jan., -1.0% in Dec. (downwardly revised from -0.7%), -0.6% in Nov.
- Manufacturing IP (+1.0% in Jan.; downwardly revised for Dec.) rebounds after two straight m/m drops, w/ durable goods up 0.8% and nondurable goods up 1.1%.
- Utilities output decreases a record 9.9% after two consecutive m/m rises while mining activity increases 2.0% vs. two successive m/m declines.
- Consumer goods output falls for the fourth time in five months, but business equipment rebounds following two straight m/m drops.
- Capacity utilization dips 0.1%-pt. to 78.3%; mfg. capacity utilization rises 0.6%-pt. to 77.7%.
Total industrial production was virtually unchanged m/m (0.8% y/y) in January after drops of 1.0% in December (-0.7% initially) and 0.6% in November, according to the Federal Reserve Board. The January IP index at 103.0 was 1.3% above its pre-COVID (February 2020) level. A 0.5% m/m increase had been expected in the Action Economics Forecast Survey.
By industry groups, manufacturing production increased 1.0% (0.3% y/y) in January after falling 1.8% in December (-1.3% initially) and 0.8% in November (-1.1% previously). Durable goods rose 0.8% (1.1% y/y) in January, the first m/m rise since October, after a 1.4% December decrease, reflecting output rises of 2.4% (7.2% y/y) in nonmetallic mineral products, 1.7% (-1.8% y/y) in machinery, 1.3% (0.0% y/y) in electrical equipment & appliances, 1.1% (10.2% y/y) in aerospace & miscellaneous transportation equipment, 1.1% (-1.4% y/y) in computer & electronic products, 0.7% (-0.2% y/y) in miscellaneous durables goods, 0.5% (4.7% y/y) in motor vehicles & parts, 0.4% (2.4% y/y) in fabricated metal products, and 0.1% (-3.6% y/y) in primary metals. However, production for wood products (-1.0%; -5.8% y/y) and furniture & related products (-0.7%; -5.8% y/y) posted their m/m drops in January.
Nondurable goods increased 1.1% (-0.5% y/y) in January after declining 2.2% in December and 0.2% in November, reflecting output gains of 3.7% (13.4% y/y) in apparel & leather goods, 2.2% (-6.5% y/y) in textiles & product mills, 1.7% (-0.4% y/y) in food, beverages & tobacco, 1.6% (0.7% y/y) in chemicals, and 0.6% (-8.5% y/y) in paper. In contrast, production for plastics & rubber products (-1.0%; -1.5% y/y) fell for the third consecutive month in January; production for printing & related support activities (-0.6%; 0.0% y/y) and petroleum & coal products (-0.2%; +1.9% y/y) declined for the second successive month.
Utilities output dropped 9.9% (-8.9% y/y) in January, the deepest m/m decline on record, due to a swing from unseasonably cool weather in December to unseasonably warm weather in January depressing the demand for heating, following rises of 5.1% in December and 2.7% in November. Meanwhile, mining activity rose 2.0% (8.6% y/y) in January after drops of 1.2% in December and 1.4% in November.
By market groups, consumer goods output fell 0.7% (-0.9% y/y) in January, the fourth m/m fall in five months, after a 0.2% decline in December, led by a 1.1% drop (-0.6% y/y) in nondurable consumer goods. Durable consumer goods, nevertheless, rebounded 0.7% (-1.7% y/y) following two straight m/m declines. Business equipment grew 1.2% (3.7% y/y) in January following two consecutive m/m drops and four successive m/m increases. Construction supplies rose 0.8% (-0.4% y/y) after two straight m/m declines. Materials production inched up 0.1% (1.1% y/y), the first m/m increase since September.
In special classifications, factory output of selected high-tech industries dipped 0.1% (-1.5% y/y) in January, the sixth successive m/m decline, on top of a 1.6% drop in December (-0.2% initially). By contrast, manufacturing production excluding selected high-tech industries rose 1.0% (0.3% y/y) and manufacturing production excluding both selected high-tech and motor vehicles & parts rose 1.0% (0.0% y/y) following their two straight monthly drops.
Capacity utilization slipped to 78.3% in January, the fourth straight monthly decline to the lowest reading since September 2021, from 78.4% in December; 1.3 percentage points below its long-run (1972–2022) average. A 79.1% rate had been expected. Manufacturing capacity utilization rose to 77.7% in January after declining 1.4 percentage points to 77.1% in December.
Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.
Winnie TapasanunAuthorMore in Author Profile »
Winnie Tapasanun has been working for Haver Analytics since 2013. She has almost 20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. A bilingual (English and Thai) with competency in French, Winnie loves to travel (25 countries so far) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.