Washington, DC, United States (4E) – Factory production in the U.S. took an unexpected dive in January, the most since May 2009, further indication that the economy was hit by the severe winter weather.
On a seasonally adjusted basis, total industrial production dropped 0.3 percent last month, according to the Federal Reserve report released Friday. The result marks the first decline for the reading since July. Manufacturing output, which accounts for the biggest portion of industrial production, was down 0.8 percent in January.
Colder weather slowed down production in assembly lines, the Fed report said, tempering activity in an industry that helped boost the economy. A rise in capital spending and improved employment that spurred consumer purchases will be needed to maintain gains in production.
The report also showed durable consumer goods output, which includes vehicles and appliances, significantly dropped in January, additional evidence that the cold weather kept shoppers off dealer shops and malls.
Manufacturing performance was not as strong as initially anticipated in the final three months of 2013. The sector advanced 4.6 percent in the fourth quarter from a year earlier, lower than the previous estimate of 6.2 percent, Friday’s report showed.
Estimates for the overall industrial production by the 87 economists polled Bloomberg News ranged from a 1.4 percent decline to a 0.7 percent gain.