Fed says U.S. industrial production increased 0.9% in January

U.S. industrial production increased 0.9 percent in January following a gain of 0.7 percent in December, the Federal Reserve reported on February 17. Manufacturing production rose 1.0 percent in January, with increases for most of its major components, while the indexes for both utilities and mining advanced 0.7 percent. At 101.1 percent of its 2002 average, output in January was 0.9 percent above its year-earlier level. The capacity utilization rate for total industry rose 0.7 percentage point to 72.6 percent, a rate 8.0 percentage points below its average from 1972 to 2009.

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Market Groups 
The production of consumer goods increased 1.1 percent in January, as the production index for consumer durables advanced 2.7 percent and the index for consumer nondurables rose 0.7 percent. For durables, increases in all of its major categories contributed to the gain; the largest contributor was automotive products, which moved up 5.1 percent. Among consumer nondurables, the output of non-energy goods rose 1.1 percent, but the output of energy goods decreased 0.5 percent. The largest gains in production among the major categories of non-energy nondurable goods were for clothing and for foods and tobacco. The decrease for energy goods reflected a drop in gasoline production; residential sales by utilities were little changed.

The output of business equipment rose 0.9 percent in January, but it remained 3.8 percent below its year-earlier level. All of its major component indexes advanced: Industrial and other equipment gained 0.5 percent, transit equipment rose 0.9 percent, and information processing equipment increased 1.7 percent. January marked the third consecutive monthly gain in output of more than 1 percent for information processing equipment.

The production of defense and space equipment moved up 1.5 percent in January after having declined in each of the previous three months.

Within non-industrial supplies, the output of construction supplies rose 1.0 percent in January but was 5.3 percent below its year-earlier level. The production of business supplies advanced 0.5 percent in January for its eighth consecutive monthly increase.

The production of materials moved up 0.8 percent in January and has averaged gains since June 2009 of about 0.9 percent per month. The index for durable materials rose 1.3 percent in January, with similarly sized gains for all of its major components. Production of nondurable materials advanced 0.8 percent. Among nondurables, the index for chemical materials rose 0.7 percent, primarily because of an increase in the production of organic chemicals. The output of energy materials edged up 0.1 percent.

Industry Groups 
In January, manufacturing output rose 1.0 percent after having slipped 0.1 percent in December; the level of output in January was 1.7 percent above its year-earlier level. Capacity utilization for manufacturing was 69.2 percent, a rate 4.1 percentage points above the trough in June 2009 but 10.0 percentage points below its average for the period from 1972 to 2009.

The output of durable goods moved up 1.4 percent in January. Among its major components, gains of 2.0 percent or more were recorded for motor vehicles and parts; wood products; electrical equipment, appliances, and components; and nonmetallic mineral products. Output for all of the other major durable goods industries increased, with the exception of furniture and related products, which decreased 1.2 percent.

Non-durable manufacturing rose 0.7 percent in January, after having edged down in December, and was 3.6 percent above its year-earlier level. Gains were recorded for most major components, with particularly large increases for food, beverage, and tobacco products and for apparel and leather products. The output of petroleum and coal products decreased 2.2 percent, and the output of printing and support moved down 0.8 percent. The index for non-NAICS manufacturing industries (publishing and logging) was unchanged.

In January, mining output gained 0.7 percent and capacity utilization rose to 86.2 percent, a rate 1.3 percentage points below its 1972-2009 average. After a sizable jump in December, the output of utilities increased 0.7 percent in January, as an increase in electric utilities was partly offset by a decline in natural gas utilities. The utilization rate for utilities rose to 83.1 percent.

Capacity utilization rates in January at industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.7 percentage point to 85.9 percent, a rate 0.6 percentage point below its 1972-2009 average; at the primary and semifinished stages, utilization rose 0.4 percentage point to 69.4 percent, a rate 12.2 percentage points below its long-run average; and at the finished stage, utilization increased 0.9 percentage point to 71.0 percent, a rate 6.5 percentage points below its long-run average.

Note: Preliminary Estimates of Industrial Capacity
The data in this release include preliminary estimates of industrial capacity for 2010. Measured fourth quarter to fourth quarter, total industrial capacity is projected to decrease 0.8 percent this year after having declined 0.9 percent in 2009. Manufacturing capacity is estimated to decline 1.0 percent in 2010 following a decrease of 1.2 percent last year. Mining capacity is estimated to move up 0.3 percent in 2010 after having declined 0.7 percent in 2009, and utilities capacity is projected to expand 2.1 percent this year, which is 0.3 percentage point faster than it had last year. These estimates will be updated with the publication in late June 2010 of the annual revision to industrial production, capacity, and capacity utilization.