Industrial production in the
United States unexpectedly shrank in January as factories took a breather after
the biggest back-to-back gain in three decades, Bloomberg
Output at factories, mines and
utilities fell 0.1 percent after a 0.4 percent gain in December, according to
figures released Friday by the Federal Reserve. The median estimate in a
Bloomberg survey anticipated a 0.2 percent increase.
Manufacturing, which makes up 75
percent of total production, dropped after revised data for November and
December showed the biggest two-month gain since 1984.
A pickup in consumer and business
spending toward the end of 2012 and stabilization in overseas markets,
including China and Europe, will help sales at companies such as Deere &
Co. and Eaton Corp. PLC. At the same time, a higher tax that is trimming
Americans' paychecks and the risk of across-the-board cuts in federal outlays
may prevent bigger gains in production.
"Manufacturing will advance slowly this
year as long as demand keeps growing and nothing knocks the economy off
course," Guy Berger, an economist at RBS Securities Inc. in Stamford,
Conn., said before the report was released. Berger was the third-best
forecaster of industrial production over the past two years, according to data
compiled by Bloomberg. "Markets like China and Latin America will help to
keep a floor under U.S. exports," Berger said.