Industrial Production Unexpectedly Decreases as U.S. Factories Cool
Feb. 15 (Bloomberg) -- Industrial production in the U.S. unexpectedly shrank in January as factories took a breather after the biggest back-to-back gain in three decades.
Output at factories, mines and utilities fell 0.1 percent after a 0.4 percent gain in December, figures from the Federal Reserve showed today in Washington. The median estimate in a Bloomberg survey called for a 0.2 percent rise. Manufacturing, which makes up 75 percent of total production, dropped after revised data for November and December showed the biggest two- month gain since 1984.
A pickup in consumer and business spending toward the end of 2012 and stabilization in overseas markets including China and Europe will help sales at companies such as Deere & Co. and Eaton Corp Plc. At the same time, a higher tax that is trimming Americans’ paychecks and the risk of across-the-board cuts in federal outlays may prevent bigger gains in production.
“Manufacturing will advance slowly this year as long as demand keeps growing and nothing knocks the economy off course,” Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. Berger was the third-best forecaster of industrial production over the past two years, according to data compiled by Bloomberg. “Markets like China and Latin America will help to keep a floor under U.S. exports.”
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