U.S. factory production grew slightly in January and stagnated in December, creating jitters among policy makers considering the global economic slowdown and the stronger dollar.
Manufacturing output grew 0.2 percent in January, reported the Federal Reserve today. Output was flat in December, down from the earlier growth estimate of 0.3 percent. The data mirrors recent surveys of factory managers that have hinted at slower economic expansion.
Economists in a Reuters’ survey had expected factory output to grow 0.3 percent last month. Much of the decline in factory output was mainly due to a 0.6 percent decline in output by automakers. Food, tobacco and beverages output also fell.
Productivity in mines also fell 2 percent, possibly due to the recent declines in gas prices that have impacted well-servicing and drilling industries.
Total industrial output grew 0.2 percent, mostly due to higher production by utility firms.
Meanwhile, U.S. housing starts dropped in January while starts for single-family homes fell from a 6 ½ -year high, though they remained well within the fringes of a steadily-improving property market.
Groundbreaking plunged 2 percent to 1.07 million units, reported the Commerce Department today. Starts for December were revised to 1.09 million-unit-pace as predicted by most analysts. Starts for single-family housing, the biggest component of the market, fell 6.7 percent to a 678,000-unit rate. The number of groundbreakings for this category had touched their strongest level since early 2008 two months ago.
Starts for the volatile multi-family housing category grew 7.5 percent to a 360,000-unit pace. Analysts expect groundbreakings for multi-family segment to grow this year as rental vacancies are currently hovering at over two-decade lows. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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