U.S. industrial production was flat in February, though underlying figures suggest steady economic growth amid a pickup in manufacturing and mining activity.
Industrial production — a measure of output at factories, mines and utilities — was unchanged from a month earlier, the Federal Reserve said Friday. Economists surveyed by The Wall Street Journal had expected the index to climb 0.2%. Output for January fell a revised 0.1% instead of an initially estimated 0.3% drop.
Overall industrial production was held in check by warmer-than-usual weather, which depressed demand at utilities, the Fed said. Elsewhere, the report was broadly positive.
“The stagnation in industrial production in February was entirely due to another weather-related contraction in utilities output, with activity in the mining and manufacturing sectors continuing to recover strongly,” Andrew Hunter, U.S. economist at Capital Economics, said in a note to clients.
Manufacturing output, the biggest component of industrial production, climbed 0.5% in February to reach its highest level since July 2008.
U.S. factory activity was stagnant through much of 2016 but appears to have accelerated in recent months. February manufacturing output was up 1.2% from the same month a year earlier.
“This may not be a manufacturing boom, but the sector is racking up solid growth that is a very welcome change at beleaguered factories,” said Michael Montgomery, U.S. economist at IHS Markit.
U.S. businesses are anticipating stronger demand from domestic consumers. Overseas, economic activity also has brightened, though a stronger dollar could make American goods more expensive overseas.
The Institute for Supply Management earlier this month said its closely watched manufacturing index rose to 57.7 February from 56 a month earlier. That was the highest level since August 2014. A reading above 50 indicates sector expansion.
Friday’s report showed output in the volatile mining sector jumped 2.7% in February to reach the highest level since November 2015. The mining index, which includes oil and natural gas extraction, was up 1.8% from a year earlier. The sector had been weighed down by weak commodity prices but appears to have stabilized.
Utility output fell 5.7% from the prior month and was down 7% from a year earlier.
Capacity use, a measure of slack in the economy, decreased 0.1 percentage point to 75.4%, in line with economist expectations. Capacity use remains well below the long-run average of 79.9%, a sign the economy is operating below its potential.