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Update: U.S. Industrial Production Rises 0.6% In February

By Kitco News
Monday March 17, 2014 9:15 AM

Editor's Note: The article was updated to include more information from the report and comments from TD Securities.

(Kitco News) - Despite expected weather problems, the U.S. industrial sector bounced back sharply in February after January’s drop, according data from the Federal Reserve.

U.S. industrial production increased 0.6% in February, an increase from January’s revised drop of 0.2%. According to media reports, economists were forecasting an increase of between 0.1% and 0.2%.

"In February, manufacturing output rose 0.8 percent and nearly reversed its decline of 0.9 percent in January, which resulted, in part, from extreme weather. The gain in factory production in February was the largest since last August.," the Federal Reserve said.

Within the manufacturing sector, the Federal reserve added that, "Much of the swing in the rates of change for production in January and February reflected the depressing effects on output of the severe weather in January and the subsequent return to more normal levels of production in February."

Gennadiy Goldberg, U.S. strategist at TD Securities, said weather didn’t appear to be a major factor in February’s industrial production data because most of the storms hit early in the month, “giving manufacturers time to catch up on any lost output.”

He added the manufacturing sector was a major reason for February’s rebound, showing broad-based gains, which could signal an improving trend in the U.S. economy after a weak start to 2014.

“Given the more positive tone of the March Empire manufacturing survey earlier this morning, we expect industrial activity to continue firming over the coming months, adding to economic growth prospects,” he said.

At the same time, the Federal Reserve reported an increase in the capacity utilization rate of 78.8.% for February, up from January’s reading of 78.5%. Economists were expecting to see only a mild increase in inflation pressure and forecasted a reading around 78.7%.

In the report, the Fed said that the capacity utilization rate was 1.3 percentage points below its long-run average.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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