Industrial production in the U.S. rebounded by more than anticipated in the month of February, according to a report released by the Federal Reserve on Tuesday.
The Fed said industrial production climbed by 0.6 percent in February after falling by a downwardly revised 0.5 percent in January.
Economists had expected industrial production to increase by 0.4 percent compared to the 0.3 percent drop originally reported for the previous month.
The stronger than expected growth was partly due to a substantial rebound in utilities output, while spikes by 7.1 percent in February after plunging by 4.9 percent in January as temperatures returned to more typical levels.
Manufacturing output also inched up by 0.1 percent in February after slipping by 0.2 percent in January, although the Fed noted factory output was unchanged when excluding a large gain for motor vehicles and parts and a large drop for civilian aircraft.
Meanwhile, the report showed a sharp pullback in mining output, which tumbled by 1.5 percent in February after jumping 1.0 percent in the previous month.
“Although the services sector is ground-zero for the coronavirus crisis, industry will not escape unscathed,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “With oil prices sharply lower over recent weeks, mining output will drop sharply in the coming months, while the shutdown of swathes of the economy will sharply reduce demand for manufactured goods too.”
The Fed also said capacity utilization for the industrial sector rose to 77.0 percent in February from 76.6 in January. Economists had expected capacity utilization to increase to 77.1 percent.
Capacity utilization in the utilities sector spike to 75.8 percent from 71.0 percent, while capacity utilization in the manufacturing sector was unchanged at 75.0 percent and capacity utilization in the mining sector dipped to 88.4 percent from 89.9 percent.
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