March 18, 2014 in Business

U.S. factories report strong output growth

February production gains were best in six months
Christopher S. Rugaber Associated Press
 
On Wall Street

Upon news of increased industrial production, the Dow Jones industrial average added 181.55 points, or 1.1 percent, to 16,247.22. The Standard & Poor’s 500 index rose 17.70 points, or 1 percent, to 1,858.83 and the Nasdaq composite rose 34.55 points, or 0.8 percent, to 4,279.95. The market’s gains were broad. All 30 members of the Dow and all 10 industry groups of the S&P 500 rose.

WASHINGTON – U.S. factory output rebounded strongly in February after harsh winter storms caused a steep drop-off in production in January. Manufacturers produced more autos, home electronics and chemicals.

The Federal Reserve said Monday that factory production surged 0.8 percent, nearly reversing a 0.9 percent plunge in January that was due mainly to weather. February’s gain was the largest in six months.

The figures suggest that factories are poised to boost output and drive more economic growth as the weather improves.

“Assuming that the weather returns to seasonal norms, output will rise rapidly in the coming months,” Paul Dales, an economist at Capital Economics, said in a note to clients.

Overall industrial production, which includes manufacturing, mining and utilities, rose 0.6 percent in February, the biggest increase since September. Industrial production had fallen 0.2 percent in January.

Auto production rose 4.6 percent after falling 5.1 percent in January. Home electronic output increased 0.7 percent. And food production rose about 1 percent.

Factories ran at 76.4 percent of capacity, up one-half of a percentage point over the month and 2.3 percentage points below the long-run average.

Manufacturing and the broader economy may be emerging from a winter slump. A rebound in factory output could drive faster growth in the coming months.

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