Industrial production, measuring the output of manufacturers, utilities and mines, rose .1% in February from January. Cold weather caused an increase in utility output, but factory and mining production declined, lowering capacity utilization two-tenths to 78.9%, instead of economist expectation of gains to 79.5%. Lower capacity utilization could prompt businesses to wait on investments.
Manufacturing, the bulk of all industrial output, declined for the third straight month, a development the Fed attributed largely to weak demand for long-lasting goods. “Manufacturing has started 2015 on a softer note than we had expected and if we do not see a pickup in the next few months we will have to consider notching down our 3% real GDP growth forecast for 2015,” John Ryding of RDQ Economics said in a note to clients. Economists said cold weather, while boosting utilities, may have crimped factories.
Resource: Wall St. Journal
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