February 15, 2017 / 2:22 PM / 6 months ago

U.S. industrial output falls as warm weather curbs heating demand

An Airbus A321 is being assembled in the final assembly line hangar at the Airbus U.S. Manufacturing Facility in Mobile, Alabama September 13, 2015.Michael Spooneybarger/File Photo

WASHINGTON, (Reuters) - U.S. industrial production fell in January as unseasonably warm weather caused a major drop in utilities output, offsetting gains in manufacturing and mining, the Federal Reserve said on Wednesday.

The U.S. central bank said its overall industrial production index fell 0.3 percent last month after a downwardly revised 0.6 percent gain in December.

Economists polled by Reuters had forecast industrial production being flat in January. December's output was originally reported as a 0.8 percent rise. The Fed's measure of the industrial sector comprises manufacturing, mining, and electric and gas utilities.

The bulk of the January decline was due to a 5.7 percent drop in utilities output because of reduced heating demand.

Manufacturing production was up 0.2 percent, matching analysts' forecasts, while mining output rose 2.8 percent.

With overall output declining in January, the percentage of industrial capacity in use fell 0.3 percentage point during the month to 75.3 percent. Manufacturing capacity use rose 0.1 percentage point to 75.1 percent.

Fed officials look to capacity use as a signal for how much further the economy can accelerate before sparking higher

inflation.

Reporting by David Lawder; Editing by Paul Simao

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