FXstreet.com (Barcelona) - Industrial Production ticked up 0.1% in January from December for the second consecutive month, as lower output in vehicle production has offset minor gains elsewhere, according to data released by the Federal Reserve.
December's reading has been revised up to a 0.1% increase from a flat reading previously reported. Output of utilities increased 2.2%, while the output of mines dropped 1.8%, and manufacturing production remained flat. Vehicle output decreased 1.3%, while computers and electronics rose 1.7%.
On the year, overall industrial production has increased 2.3%.
Capacity utilisation has remained flat at 81.5% in January from December, as December's record has been revised up from the previously estimated 81.4%. Capacity utilisation is now 0.4% higher than in January 2007, and 0.5% above its 1972-2007 average.
Ian Shepherdson, Chief U.S. Economist at High Frequency Economics, Ltd, the gain in production has been weather related: The gain in production was weather-related; utility output rose 2.2%, but manufacturing production was flat. Within manufacturing, a 1.3% drop in vehicle output was offset by a 1.7% jump in computers and electronics. Home electronics goods output is up 14.4% y/y, while business information processing is up 11.0%, but growth elsewhere is much slower and defense and construction are both down y/y.
Ex autos, industrial production has risen somewhat higher helped by a weak dollar, in Shepherdson's opinion: Overall, manufacturing ex-autos has risen by 0.2% per month over the past three months, thanks in large part to the weakness of the dollar, which is boosting exports. So far this has kept GDP positive, but don't bet on it lasting forever.