Output at nation's factories, mines and utilities posts strong surge, according to Federal Reserve.
February 17, 2004: 9:49 AM EST
NEW YORK (CNN/Money) - U.S. industrial output rose in January, the Federal Reserve said Friday, slightly edging Wall Street forecasts.
Industrial production rose 0.8 percent after being flat in December, according to the Fed, which also said factories, mines and utilities ran at 76.2 percent of capacity in the month, compared with 75.6 percent in December.
Economists, on average, expected production to rise 0.7 percent and capacity use of 76.2 percent, according to Briefing.com.
Separately, the New York Fed said its Empire State index of New York manufacturing activity rose to a record high in early February, defying Wall Street expectations for a slight decline.
The reports helped lift U.S. stock market futures, which pointed to a positive opening on Wall Street. Treasury bond prices also rose.
Much of the gain in the Fed's industrial production report was due to a 5.2-percent jump in the output of utilities, due mainly to unusually cold weather in January. Industrial output fell 1.3 percent in December.
Factory output rose 0.3 percent, compared with a 0.1-percent gain in December. Mining output rose 0.1 percent after rising 0.2 percent in December.
The report's strength was consistent with the results of national and regional surveys of manufacturing activity -- though that hasn't always been the case in recent months.
The Institute for Supply Management's closely watched index hit its highest level in 20 years in January, while surveys from the New York and Philadelphia Fed, along with the Chicago Purchasing Managers Index, have also been robust.
Some economists wonder if those surveys aren't as reliable as the hard numbers coming from the Commerce Department and the Fed, which have shown a decent, but not neck-breaking, pace of factory activity as 2004 began.
At 76.2 percent, the rate of capacity utilization is still 5.1 percentage points below its 1972-2002 average.
In January, the Fed left its key overnight lending rate at its lowest level in 40 years, indicating that inflation was still a distant threat to the economy, despite strong economic growth, higher commodity prices and other signs of potential inflation.
Some economists believe that the Fed will raise rates only when the "slack" of idle factory equipment and, more importantly, unemployed Americans, is taken up significantly.
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