U.S. industrial production increased in January, following a drastic gain in December.

The Federal Reserve’s latest Industrial Production and Capacity Utilization report, issued on Feb. 14, showed production increased 0.5% in January month-to-month, exceeding market expectations of a 0.3% rise polled by major news outlets. Production increase 1.0% in December.

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At 103.5% of its 2017 average, total industrial production increased 2.0% year-over-year. Capacity utilization moved up to 77.8%, which is a 1.8-percentage-points below its long-run (1972-2023) average.

Total January production was impacted by an increase of 0.2% in manufacturing that was boosted by a 7.2% increase in utilities.

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However, January was negatively impacted by a decline in manufacturing output by 0.1%, held back by a decrease in motor vehicles and parts of 5.2%. Likewise, mining fell 1.2% in January.

United States Total Industrial Production Index – Month-Over-Month

Source: tradingeconomics.com

Market Groups

The majority of market groups saw gains in January. The index for consumer goods increased 0.8%, as an increase in the production of nondurables consumer goods offset a decline in the production of durable consumer goods. The nondurables increase was supported by gains in energy an chemical products.

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Business equipment showed a positive gain with a 2.1% increase in January, driven by a strong increase in the production of civilian aircraft.

Industry Groups

Manufacturing output decreased 0.1% in January month-to-month. Nondurable manufacturing saw a decrease of 0.3%, with decreases in four categories — food, beverage and tobacco products, printing and support, petroleum and coal products an plastics and rubber products. In contrast, the index for other manufacturing (publishing and logging) increased 0.3%.

Mining output decreased 1.2% in January month-to-month, while utilities increase 7.2%, supported by a gain in electric (6.1%) and natural gas utilities (15.4%).

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Capacity utilization for manufacturing ticked down by 1.9-percentage-points in January to 76.3%.