U.S Manufacturing Output Rises

By Unknown

Sabtu, 30 Juli 2016

U.S Manufacturing Output Rises

The strong demand for machinery and steel US led factories to increase production in February, according to data from the Federal reserve that suggested a slowdown in manufacturing may be easing.

data released Wednesday showed us factory output rose 0.2 percent last month, which was slightly stronger than the 0.1 percent gain expected by economists in a Reuters poll.

overall industrial production fell 0.5 percent during the month, dragged down by the slump in oil production and a drop in utilities output.

Manufacturing accounts for about a tenth of the US economy and cooled last year, hit by slowing demand overseas and several months of dollar appreciation. A sharp drop in oil prices also affected the energy sector of the United States, the reduction in demand in some plants.

But the dollar has recently weakened and the outlook for US domestic demand has improved due to the robust employment growth. On Wednesday, the dollar was nearly 3 percent lower against a basket of currencies .DXY on a year base year.

In February, US production of goods meant to last at least six months rose 0.4 percent, with gains in the production of primary metals and machinery.

Economists polled by Reuters had forecast an overall industrial production fell 0.3 percent last month.

The index for utilities fell 4 percent after surging 4.2 percent a month earlier.

With production on the rise, the percentage of industrial capacity in use fell to 76.7 last month from 77.1 in January.

Fed views the capacity utilization as a leading indicator to decide how much more the economy can grow before spark higher inflation.

Reuters

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