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Economic Report: U.S. industrial production jumps in January on demand for heating

The numbers: Industrial production surged 1.4% in January, after a slight 0.1% decline in the prior month, the Federal Reserve reported Wednesday.

The gain was well above Wall Street expectations of a 0.5% gain, according to a survey by The Wall Street Journal.

Capacity utilization jumped to 77.6% in January from 76.6% in the prior month. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities. It is the highest rate since early 2019.

Economists had forecast a 76.7% rate.

Key details: Manufacturing rose 0.2% in January after a slight 0.1% fall in the prior month. 

Motor vehicles and parts output fell 0.9x% after a 0.4% fall in the prior month. Excluding autos, total industrial output increased 1.5%.

Utilities output surged 9.9% in January as cold weather returned across the country. Mining output, which includes oil and natural gas, rose 1% after a 1.5% gain in the prior month.

Big picture: Manufacturing has been on solid footing as factory owners were able to establish effective coronavirus protocols. But supply-chain woes and shortages continue to bedevil the sector.

Market reaction: Stocks
DJIA,
-0.26%

SPX,
-0.41%

were set to open lower Wednesday on concerns about Russia’s troop buildup around Ukraine.

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