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 reported. 


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.