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Industrial output jumps
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February 15, 2000: 10:28 a.m. ET
January output up 1%, exceeding forecasts; capacity use in line
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NEW YORK (CNNfn) - Industrial production rose in January at a much faster rate than expected, reflecting continued strength in U.S. manufacturing, the Federal Reserve said Tuesday.
Production at U.S. factories, mines and utilities jumped 1 percent in January, the central bank said, more than double the 0.4 percent growth in December and well above the 0.6 percent increase forecast by economists surveyed by Briefing.com.
It was the biggest monthly increase since a 1.8 percent gain in August 1998, with most major industries posting manufacturing gains, the Fed said.
Factories ran at 81.6 percent of capacity last month, up from a revised 81.1 percent in December and about in line with analysts' forecasts. It was the highest rate since the 81.9 percent of capacity reported in August 1998.
One economist said the strong data likely will help sway the Federal Reserve into enacting another interest rate increase to quell inflation growth.
"This report is a sign that the manufacturing sector is on solid ground after a weak performance in 1998 and the early part of 1999," Michael Moran, chief economist at Daiwa Securities America Inc., told Reuters.
"It fits an outlook for higher interest rates ahead," he said. "I would be surprised if the Fed didn't act again in March."
Automakers boosted January production to 13.3 million new cars and trucks a year, from 12.9 million in December. Excluding motor vehicles and parts, industrial output increased 0.8 percent last month, after a 0.6 percent gain in December.
Mining production climbed 1 percent in January after being flat in December.
The data helped put pressure on the bond market. After the 9:15 a.m. ET reports were released, the benchmark 30-year Treasury slipped 10/32 in price, pushing the yield, which moves in the opposite direction, up to 6.25 percent from 6.22 percent late Monday.
-- from staff and wire reports 
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Federal Reserve
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