Industrial Prodcution Edges Up, Manufacturing Slips
WASHINGTON (AP) — Industrial production edged up 0.1 percent in February, beating expectations and marking the eighth straight monthly increase. But the key manufacturing sector produced less —for months a rare bright spot — produced less, muting hopes for a speedy recovery.
The Federal Reserve reported Monday that manufacturing, the index's largest component, fell 0.2 percent; while mining and utilities increased by 2.0 percent and 0.6 percent, respectively.
Manufacturing took a hit from major winter storms that shut down most of the Northeast in February, decreasing hours worked at factories and restraining workers' earnings. However, the storms increased demand for heating energy, boosting mining and utility production.
It was a return to more measured gains after January's 0.9 percent increase. But the index's consistent upward trend suggested that economic improvement is durable, if modest.
American industry was operating at 72.7 percent of its full capacity. It was a 0.2 percent from January, but still 7.9 percentage points below its average from 1972 to 2009.
Production of consumer goods fell in February as factories built fewer cars, appliances and other durable goods.
When production of consumer products rises, it will indicate that consumers are spending again — a necessary condition for robust economic growth. High unemployment and stagnant wages have prevented a consumer-driven rebound.