US factory output jumped 1.2 percent in February
WASHINGTON (AP) -- U.S. factory output jumped last month, led by big gains in the production of cars, computers and furniture.
The Federal Reserve said Friday that manufacturing output rebounded 1.2 percent in February, the most since October and following three months of weak or negative readings. Factory production has increased a healthy 2.5 percent in the past year.
Manufacturers are benefiting from robust spending by consumers and businesses and solid growth overseas. The dollar has declined in value over the past year, which also makes U.S. goods cheaper overseas. Many economists expect last year's tax cuts and rising optimism among business owners to fuel greater investment in machinery and information technology equipment.
"The big picture in this report is that the manufacturing upswing is back on track," said Ian Shepherdson, chief economist at Pantheon Economics.
Still, consumer demand waned a bit at the start of this year, which could weigh on factory output in the months ahead.
Overall industrial production, which includes mines and utilities, rose 1.1 percent in February after a decline of 0.3 percent. Mining output soared 4.3 percent. Utility production plunged 4.7 percent as warmer weather reduced demand for heating.
The rise in mining activity was mostly driven by greater oil and gas drilling. Oil prices have stabilized at about $60 a barrel, which has encouraged oil companies to set up more rigs.
Auto production climbed 3.9 percent last month after slipping 0.2 percent in January. Sales were strong at the end of last year, spurred in part by people in Texas and Florida replacing hurricane-destroyed cars. But that process has mostly been completed, and auto sales have slowed in recent months.
Furniture production increased 1.9 percent, and computer output rose 1.5 percent, the Fed said.
Other recent reports suggest manufacturing is healthy. A survey of purchasing managers found that factory activity expanded at the fastest pace in 14 years in February, lifted by strong job gains and an increase in inventories. Production and new orders grew but at a slightly slower pace.
Manufacturers are hiring at a rapid clip, adding 224,000 new jobs in the past 12 months.