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Output takes a breather
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March 17, 1998: 10:10 a.m. ET
February industrial production is flat, and capacity use cools to 82.7 percent
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NEW YORK (CNNfn) - U.S. industrial output was flat in February as warm weather kept demand for energy low and automakers continued to ease off speedy production.
Industrial production at the nation's factories, mines and utilities was unchanged last month, the Federal Reserve Board reported Tuesday. The report matched economist expectations.
The Fed also revised the figure for January upward by 0.1 percent. That means February is the first month in more than a year without an increase in industrial output.
"The way to look at it is that demand is very strong and there is a slight moderation in the rate of growth," said Mickey Levy, chief economist at NationsBanc Montgomery Securities.
Meanwhile, capacity utilization fell .3 percent to 82.7 percent, also in line with economists' estimates.
"There was a decline in aggregate hours worked, but that was offset by an increase in productivity," Levy said.
By sector, manufacturing was flat even though output of motor vehicles dropped for the third straight month. But auto production is still at relatively high levels, the Fed reported.
Still coping with warm weather, which drives down demand, utilities posted just a 0.9 percent rebound in February after a 3.1 percent drop in the previous month.
Bonds took few cues from the news. The 30-year Treasury issue was up 6/32 of a point in price, with the yield down to 5.84 percent.
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