Connect with us


Manufacturing Output in the U.S. Climbs in January



Manufacturing Output in the U.S. Climbs in January

Although manufacturing output at American factories increased in January, it was substantially lower than initially estimated due to higher borrowing rates that are harming the industry.

According to data released by the Federal Reserve on Wednesday, manufacturing output rose 1.0% in December. The previously estimated 1.3% decline in factory production for December was revised down to a 1.8% decrease. Economists polled by Reuters had forecast factory production would increase 0.8%.

On a yearly basis, output increased 0.3% in January. The demand for goods, which are typically purchased on credit, has been weakened by increased interest rates, which affect manufacturing, which makes up 11.3% of the US GDP.

The national factory activity index from the Institute for Supply Management has decreased for three months running. Since last March, the Fed has increased its policy rate by 450 basis points, moving it from near zero to a range of 4.50%–4.75%. The majority of the hikes occurred between May and December. In March and May, two further rate increases of 25 basis points are anticipated.

After two consecutive months of decline, production at auto manufacturers increased 0.5% in January. Additionally, there were increases in the production of durable manufactured items such as machinery, electronics, electrical equipment, appliances, and components. Food and other non-durable commodities production have also increased.

After falling for two consecutive months, mining output increased by 2.0%. Due to the unexpectedly mild conditions, which reduced demand for heating, utilities production fell 9.9%.

Sign Up For The Capitalist Newsletter

The gains in mining and manufacturing balance the decline in utilities, maintaining the level of overall industrial production. In December, industrial output fell 1.0%.

The manufacturing sector’s capacity utilization, a gauge of how fully businesses are utilizing their resources, increased by 0.6 percentage points in January to 77.7%. It is 0.5 points under its long-term average.

In January, the industrial sector’s overall capacity use fell 0.1 percentage points to 78.3%. Its 1972–2021 average is 1.3 percentage points lower.

The U.S. central bank’s officials frequently analyze capacity use indicators to determine how much “slack” there is in the economy and how much longer growth can continue before it starts becoming inflationary.

Up Next:

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Continue Reading
Sign Up For The Capitalist Newsletter

Copyright © 2023 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.

Is THE newsletter for…


Stay up-to-date with the latest kick-ass interviews, podcasts, and more as we cover a wide range of topics, in the world of finance and technology. Don't miss out on our exclusive content featuring expert opinions and market insights delivered to your inbox 100% FREE!


Get ready to stay up-to-date with the latest business and market news from around the world!

The Capitalist is here to provide you with insightful data, analysis, and even videos to keep you informed.