“The hits just keep on coming,” as the old-time disk jockeys used to say on radio broadcasts regarding the top 40 hits. And, as far as the economy is concerned, that old saying was never more on the mark.
Thus, one day after the Labor Department reported another decline in weekly and continuing jobless claims, and less than a week after the Labor Department issued very encouraging metrics on the overall employment situation, the Commerce Department came out with data showing that industrial production leaped ahead by 0.7% in February. That increase easily topped the consensus forecast of a 0.4% rise. In January, such output had been flat, which represented a revision to the earlier estimate of a decline of 0.1%.
Meanwhile, manufacturing, the largest of the three components that make up the aggregate industrial production index, rose by 0.8% last month. That solid rise followed a weather-induced drop of 0.3% in January. Stellar gains of 1.7% and 1.3%, respectively, had been recorded in November and December.
At the same time, the other two components, mining and utilities output, showed differing results, with mining dropping by 0.3%, last month, while output at the nation's utilities climbed by 1.6%. Utilities usage had been up strongly in January as the temperatures had fallen precipitously in some areas of the country. In December, by comparison, warm temperatures across the nation had led to a plunge in output at the utilities.
The other part of this report has to do with capacity utilization at the nation's factories. Here, such use rose to 79.6% last month. That was the highest average level of utilization since March of 2008, when the reading had been 80.1%. It should be noted that five years ago the nation was in the midst of the worst recession since the 1930s. The 79.6% reading was up from January's 79.2%. In October of last year, by comparison, capacity utilization had been just 78.1%.
Here, as well, this series is further broken down, with manufacturing activity rising from 77.8% in January to 78.3% last month. Also, mining use fell last month from 90.8% to 90.2%, but activity levels rose at the nation's utilities, going from 74.3% in January to 75.4% in February. On the whole, this was a solid report and was one additional strong indication that the U.S. economy is gaining a nice amount of traction as the first quarter concludes. At the time of this article's writing, the author did not have positions in any of the companies mentioned.