Activity at the nation’s factories rose in February the most in six months, according to a new Federal Reserve report.
Manufacturing increased 0.8% compared to the month before, nearly erasing a 0.9% decline in January, which the Fed attributed to extreme weather.
Total industrial production for February, which includes the total output from the nation’s factories, mines and utilities, increased 0.6% following a 0.2% drop in January. The increase was greater than many analysts were expecting.
The output of utilities edged down 0.2% in February, following a jump of 3.8% in January, while the production at mines moved up 0.3%.
In February, the production of consumer goods rose 0.8% and was 2.6% above its level of a year earlier, while production of business equipment rose 1.3% in February, after having been little changed over the preceding four months.
“Relatively encouraging data on the manufacturing front,” said Lindsey Piegza, chief economist with the investment firm Sterne Agee. “The Empire Index, an early regional release gauging activity levels in the New York area, suggesting modest improvement in manufacturing as winter weather moderates and seasonal impediments to capacity and output are relived somewhat. Still inventory stockpiles are high meaning less immediate pressure to increase activity. Last week, the wholesale inventory to sales ratio increased to an 11-month high."
She said going forward, even as temperatures improve, production is likely to remain uneven amid tepid domestic and volatile international demand.