U.S. Industrial Production Declined in January

U.S. industrial output fell in January, driven down by unseasonably warm temperatures and weaker aircraft production at Boeing.

Industrial production, a measure of factory, mining and utility output, decreased a seasonally adjusted 0.3% in January from the prior month, the Federal Reserve said Friday, matching economists' expectations.

Utility production dropped 4% last month, with electric and natural gas utilities falling 3.2% and 7.7%, respectively, as Americans cut back on their energy consumption during a warmer-than-usual January.

Manufacturing output, the biggest component of industrial production, ticked down 0.1% in January from a month earlier. That reflected a 7.4% decrease in aerospace production as Boeing "significantly slowed production of civilian aircraft," the Fed said.

Excluding the production of aircraft and parts, factory output was up 0.3%, offering signs of improvement. Manufacturing production was flat in the latter half of 2019 after declining earlier last year.

The U.S. is a service-oriented economy, meaning manufacturing accounts for a small share of gross domestic product. Still, the sector is highly sensitive to swings in global demand, making it an important indicator of broader economic shifts.

U.S. economic growth expanded at a moderate pace last year. While consumer spending has been strong, business investment and trade have been on shaky footing.

Capacity utilization, which reflects how much industries are producing compared to what they could potentially produce, decreased by 0.3 percentage point to 76.8% in January.

Write to Sarah Chaney at sarah.chaney@wsj.com and David Harrison at david.harrison@wsj.com


  (END) Dow Jones Newswires
  02-14-20 0930ET
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