Factory Output Jumps 0.7% in January

Factory output jumps 0.7% in JanuaryWASHINGTON (AP) - U.S. factories boosted output last month and December ended up being their best month of growth in five years.

Strong auto sales and growing business investment in machinery and other equipment are keeping factories busy and helping the economy grow.

The Federal Reserve said Wednesday that manufacturing production increased 0.7 percent in January. And output soared 1.5 percent in December, according to an upward revision. That was the biggest gain since December 2006.

Overall industrial production, which includes output by mines and utilities as well as factories, was unchanged in January. The flat reading was mostly because Americans are using less energy to heat their homes during the unseasonably warm winter.

Factory output has risen 16.7 percent from its low point during the recession, in June 2009. It is still 7.1 percent below its December 2007 peak.

Jonathan Basile, an economist at Credit Suisse, said December and January marked the best two months of growth for manufacturing since the summer of 2009, when the recession ended.

"The manufacturing sector is on a tear," Paul Ashworth, an economist at Capital Economics, said in a note to clients.

Auto production rose 6.8 percent in January, the biggest gain since July 2010, according to the Fed report. Car sales rose by the most in more than two years in January, after posting healthy sales gains in November and December.

Industrial machinery production increased 2.2 percent, after an even larger gain in December. Computer and electronics production moved up 1.4 percent.

Two strong months of manufacturing growth are among other encouraging signs that show the economy could grow at a steady pace this year. Five straight months of solid job growth has lowered the unemployment rate to 8.3 percent, the lowest level in nearly three years.

Several factors could weigh on growth this year. Gas prices are rising again. Europe's financial turmoil could weaken demand for U.S. exports. And another year of weak pay increases could force consumers to cut back on spending.

Still, the economy is growing and manufacturing is accelerating. That has helped drive the slow but steady recovery.

The economy grew at an annual pace of 2.8 percent in the final three months of last year, a full percentage point higher than the previous quarter.

Factory activity expanded at the fastest pace in seven months in January, according to a private survey by the Institute for Supply Management. New orders and order backlogs rose at the fastest pace in nine months.

Manufacturing companies have strongly boosted their efficiency in recent years, automating many plants and processes. That's allowed them to produce more with fewer workers.

Still, many are hiring. The government said factories added a net 50,000 workers in January, the most in a year. And manufacturers added a net 235,000 jobs in 2011, the biggest annual rise since 1997.

Another positive sign: the average work week for manufacturing employees increased last month.

Increase your money and finance knowledge from home

Socially Responsible Investing

Invest in companies with a conscience.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

31 Comments

Filter by:
truth 1st

FBI has officially declared gold owners terrorists. Big fed gov’t has discovered that if we the people chose to go back to real money ( gold/silver ) and/or barter they’re history. We allow the fed to exist and they don’t like it. Help fire the fed leaches and start using real money as much as you can. Your local coin dealer has coins for you to exchange your fed res notes. I use silver eagles for services and even gasoline at my favorite mom and pop stores. The gas station owner loves to sell me a tank of gas for 1 silver eagle at face value of 1 dollar and then selling that dollar 40 or so fed res notes. This shows his taxable income on the sale of the gasoline as a -39 dollars ( loss ) and offsets his tax liability by reducing his reg sales profits. If you make the effort most service providers love it. It also reduces your sales taxes to the face value of 1 dollar, its sooo cool!

February 16 2012 at 11:55 AM Report abuse rate up rate down Reply
truth 1st

abcadams1
I guess in your life the glass is always half empty. Are you a downer with your co-workers, spouse and kids as well?
-----------------------------------------------------------------------My glass use to be half STOLEN by libtard controled fed govt. Not any more baby I will not enable socialism. The sooner the fed defaults and fades away the better.

February 16 2012 at 11:55 AM Report abuse rate up rate down Reply
Samir semaan

This what I said six months ago about the manufacturing sector and the progress that was made while the economy improved on Dec and Janury and a good progress was made in the economy but unless the enforcement on social programs the ecomy will not recover as fast as possibl.e and the need for explanation

February 16 2012 at 12:26 AM Report abuse rate up rate down Reply
tjstieg

When was the last time anyone saw a TV made in USA or a washer or dryer, or even just a toaster for that matter. Manufacturing is up 0.7% but of what exactly--cars in non union states by Hyundai, BMW,etc?

February 15 2012 at 11:21 PM Report abuse +1 rate up rate down Reply
2 replies to tjstieg's comment
Finchie

Another blogger said earlier that she bought some toothpicks and they were made in China.

February 16 2012 at 12:35 AM Report abuse rate up rate down Reply
bggdg

In total, for nondurable goods -- things like food, clothing and toys -- purchased in the U.S. 76.2% are made in America. For durable goods -- things like cars and furniture -- 66.6% are made in America

February 16 2012 at 8:46 AM Report abuse -1 rate up rate down Reply
Mike Massey

If you want to get more out of factories then get the unions under control.

February 15 2012 at 11:15 PM Report abuse +2 rate up rate down Reply
abcadams1

A lot of Americans have been praying for a long time for jobs to return to the U.S. I hope this is the beginning of a sign that God is finally answering those prayers.

February 15 2012 at 11:02 PM Report abuse rate up rate down Reply
2 replies to abcadams1's comment
truth 1st

Not a chance. Better start learnning how to produce on your own

February 15 2012 at 11:10 PM Report abuse +2 rate up rate down Reply
1 reply to truth 1st's comment
abcadams1

I guess in your life the glass is always half empty. Are you a downer with your co-workers, spouse and kids as well?

February 15 2012 at 11:11 PM Report abuse -2 rate up rate down
bggdg

As a percent of the total workforce, manufacturing employment peaked in 1960 at 29% and is now down to 14%. Of course, during this time, manufacturing output has soared. Just as importantly, all kinds of today's employment are in jobs that didn't even exist in 1960.

February 16 2012 at 8:47 AM Report abuse +1 rate up rate down Reply
1 reply to bggdg's comment
truth 1st

WOOF! all part of normal economic progress same as agricultre employs less than 2% it was almost 100% at the begining of our nation. pRODUCTIVITY increases mean more for every one to go around! Praise God for the free market He gave us!

February 16 2012 at 11:57 AM Report abuse rate up rate down
truth 1st

Worried that the Federal Reserve and the U.S. dollar ARE on the brink of collapse, more than a dozen states have proposed using their own alternative currencies of silver and gold. ---NEW YORK (CNNMoney) -- Lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.

"In the likely event of hyperinflation, depression, or the breakdown of the Federal Reserve, State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.

Unlike individual communities, which ARE allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it ALLOWS the states to make "gold and silver Coin a Tender in Payment of Debts."

legislators who are proposing state-issued currencies, that means gold and silver are lawful said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.

The state gold rush: Utah became the first state to introduce its own alternative currency when Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment. Under the law, the coins -- which include American Gold and Silver Eagles -- are treated the same as U.S. dollars for tax purposes and eliminates capital gains taxes.

Since the face value of some U.S.-minted gold and silver coins -- like the one-ounce, $50 American Gold Eagle coin -- is so much less than the metal value (one ounce of gold is now worth more than $1,700), the new law allows the coins to be exchanged at their market value, based on weight and fineness.

February 15 2012 at 11:00 PM Report abuse rate up rate down Reply
truth 1st

Yes we are sooo lucky we don't pay more to the educrats, lawyers, politicians and all other federally paid parasites. How about we close federalism all together and stop being billed for any of it. We 50 state govts to do the job and we already over pay them. Fire the leaches end the fed!

February 15 2012 at 10:59 PM Report abuse -1 rate up rate down Reply
truth 1st

Same OLD, tired, libtard, LIE! Always with the single digit growth. Real inflation is over 15% and rising. This means we spent more to get LESS! That’s called CONTRACTION to all non kool aid libtards!

February 15 2012 at 10:58 PM Report abuse -1 rate up rate down Reply
ajt1025

Gee now we can all go out and buy a new house, car, (Toyota of course) and new TV's. yeah things are picking up here in America with the loads of ships on the WEst cost unloading daily.

February 15 2012 at 8:41 PM Report abuse rate up rate down Reply