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Industrial output steady
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February 17, 1998: 10:38 a.m. ET
The ravages of El Nino help keep overall production unchanged
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NEW YORK (CNNfn) - American industry proved no match for Mother Nature in January as the fallout from El Nino's inclement weather systems dragged down utility output and helped hold overall industrial output in check.
Industrial production remained unchanged last month as U.S. factories operated at 83 percent of their overall capacity, a slight dip from December's level of 83.3 percent, the Federal Reserve Board reported Tuesday.
The figures fell short of economists' expectations of a 0.2 percent rise in industrial output, itself a downward revision from December's predictions of a 0.5 percent increase. Economists had expected a capacity utilization of 83.4 percent.
Bond investors seemed to take the report in stride as they continued to cash in on recent market rallies. The benchmark 30-year Treasury bond was up 19/32 to yield 5.80 percent.
Among the major industry groups, activity in the manufacturing sector grew, though at a slightly more modest rate than last summer and fall. Factories increased their output 0.3 percent in January, down from 0.4 percent in December, due in part to sluggish automobile sales among the Big Three.
Mining output rose 1.5 percent in a reversal of fortune following several months of declines.
But at least one analyst said the ravages of El Nino, which has sent the mercury soaring to unseasonable winter highs in many coastal areas, had an adverse effect on energy use.
"We weren't running our heaters very much this winter and this would have the effect of slowing down production," said Diane Swonk, an economist with First Chicago NBD.
Striking an upbeat note, Swonk said the figures reflected bottom-line stability across the economy, despite the perception of an Asian backlash.
""We're getting too much in love with the story of a slowdown coupled with benign inflation," she said.
Despite stagnation in January, industrial production posted a year-to-year gain of 5.5 percent from January 1997. 
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Federal Reserve Board
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