US Manufacturing Steps Up in January

According to a story published by Bloomberg, the output of manufacturing in America increased in January by the most since last July. The boost indicates a stabilizing manufacturing industry to kick off the new year.

Factories saw an advance of 0.5 percent in January, after a 0.2 percent drop-off in December. Factories account for three-quarters of all US production. These numbers are listed in the latest Federal reserve report that was issued today. Output as a whole, which includes utilities and mines, increased by 0.9 percent—more than was forecasted.

Production in US factories was helped by the largest gain in the output of consumer goods since last summer. The increases were reflected in both durable and nondurable goods. The boost may be a clear sign that trouble are coming to an end, particularly the stress caused by a stronger US dollar, trouble in markets overseas, and low spending in the energy sector.

“It looks like we’re getting some stabilization,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC in New York. “The commodity-related headwinds to manufacturing are seemingly dissipating.”

Bloomberg surveyed multiple economists in which the median forecast predicted a 0.2 uptick in manufacturing output. For complete industrial production, including mining and utilities, the forecast was a 0.4 percent increase.

Colder weather in January contributed to a rise in utility output, which jumped a whopping 5.4 percent from the previous month. That’s the biggest jump since December 2009. December 2015 was the warmest December on record, which caused a drop in utilities of 2.9 percent.

Mining production takes into account oil drilling, and it remained steady after four months of decline. The weak price of oil is taking a toll on the mining industry, experts say. According to the Fed’s report, drilling decreased 5.9 percent in January.

Capacity utilization, which gauges how much of a plant is being used, jumped from 76.4 percent in December to 77.1 percent in January.