U.S industrial output drops by 0.3% in January weighed by warm weather and Boeing’s production halt

The U.S Federal Reserve released its monthly industrial production report for January on Friday. As per the data, industrial production dropped by 0.3% in the United States last month. Much of the decline was attributed to unseasonably warm weather that weighed on the utilities’ output. Boeing’s decision to halt production of its grounded 737 MAX fuel-efficient jetliner further contributed to the downbeat industrial production in January.

Friday’s data suggested that manufacturing production in the U.S declined by 0.1% in January that was noted in line with what the analysts had forecast. December’s reading, however, was downwardly revised to show a 0.1% monthly gain to end the year instead of 0.2% that was previously reported.

December’s Industrial Output Revised To A 0.4% Monthly Decline

December’s industrial output as a whole was subsequently revised to a 0.4% monthly decline as compared to a 0.3% drop that was previously announced.

Overall industrial output in January was anticipated by economists to see a 0.2% decline versus a 0.3% that was printed on Friday. The data also highlighted the U.S factory production to have dropped by 0.8% in January (annualized basis) that mirrored the annualized decline recorded in industrial production as a whole.

In terms of aerospace and other miscellaneous equipment for transportation, the drop was registered at 7.4% in January versus a 0.5% improvement that was announced in December. The drop, according to the U.S Fed, was largely ascribed to Boeing’s decision of suspending 737 Max production until it receives approval from the Federal Aviation Administration (FAA) to return for commercial flights.

On an annualized basis, U.S vehicle assemblies in January were printed at 11.29 million units that also contributed to the aforementioned decline. Excluding motor vehicles and a range of relevant parts, manufacturing output was 0.3% down in January.

Other Noticeable Figures In Friday’s Data

Other notable figures in Friday’s data include a 76.8% decline in capacity usage at mines, factories, and utilities. The reading was branded the weakest since September 2017. In December, the drop was noted at 77.1%.

Utility production in the United States was 4.0% down in January versus December’s 6.2% decline. Output at mines, on the other hand, climbed 1.2% last month as compared to December’s 1.5% gain.

The forex market didn’t respond significantly to this economic data on Friday. The effect was largely offset by other, more significant reports such as that of U.S retail sales in January by the Census Bureau and the consumer sentiment index by the University of Michigan.