U.S. Industrial Output Probably Rose in January on Utilities

U.S. Industrial Output Probably Rose in January on Utilities

Feb. 15 (Bloomberg) -- Industrial production in the U.S. rose in January, led by higher utility output that was pushed up by colder-than-normal temperatures, a survey of economists indicated before a report today.

Production at factories, mines and utilities rose 0.1 percent, according to the median forecast in a Bloomberg News survey of 79 economists before a Federal Reserve report. Some economists, such as Ethan Harris at Lehman Brothers Holdings Inc. in New York, estimate that manufacturing, which makes up four-fifths of industrial output, fell as the economy slowed.

``We expect another lackluster month for production in January,'' said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado. ``The flat production trajectory as we enter the first quarter is in line with our 1 percent gross domestic product forecast'' for the first quarter.

Growing overseas economies, such as China's, and a weaker dollar are boosting U.S. exports and may keep manufacturing from collapsing as American companies and consumers rein in spending. Other reports today may show the cost of imported goods rose in January and consumer confidence weakened this month.

The Fed is scheduled to release its industrial production report at 9:15 a.m. in Washington. Forecasts in Bloomberg's survey ranged from a 0.2 percent drop to a 0.5 percent gain.

The average temperature in January was 30.5 degrees Fahrenheit, 0.3 degree below the mean temperature for that month in the 20th century, according to the National Climatic Data Center in Asheville, North Carolina. The Northeast was hit by blizzard conditions at the end of the month as a storm system spread freezing air and wind gusts from Washington to Boston.

Capacity Utilization

Capacity utilization, which measures the proportion of plants in use, fell to 81.3 percent from 81.4 percent in the prior month, economists forecast.

Prices of goods imported into the U.S. rose 0.5 percent in January, reflecting higher oil prices that have since eased, a Bloomberg survey indicated. The Labor Department release is scheduled for 8:30 a.m. Prices probably increased 12.7 percent from a year before.

Consumer sentiment is forecast to drop, hurt by falling home prices and elevated energy costs. The University of Michigan/Reuters preliminary index of consumer sentiment for February fell to 76, according to a Bloomberg survey before today's 10 a.m. release. That would be down from 78.4 in January.

Economic growth slowed to a 0.6 percent pace in the fourth quarter, and the economy lost jobs in January for the first time in more than four years. Economists surveyed by Bloomberg News this month indicated even odds that the economy will enter a recession this year.

Sales Slump

Cars and light trucks sold at a 15.2 million annual pace in January, the worst showing since October 2005, industry figures showed. Economists for General Motors Corp., Ford Motor Co. and Chrysler LLC said Jan. 15 that U.S. sales of cars and light trucks may fall for a third straight year in 2008.

``This is going to be a challenging year for the auto industry,'' Paul Traub, a Chrysler economist, said at a conference in Detroit last month.

Exporters are helping to keep factory assembly lines moving. General Electric Co. said fourth-quarter profit rose 15 percent on higher international sales of jet engines and power- plant turbines, drawing more than half its annual revenue from overseas for the first time.

GE Chief Executive Officer Jeffrey Immelt's push into global markets was led by a 30 percent jump in the GE Infrastructure group's sales, as developing countries built cities, hospitals and airports, and the dollar weakened.

``Every place we went there's a need for power, there's a need for planes, there's lots of capital being invested, and there's just no sign this global infrastructure boom is slowing at all,'' Immelt told a conference call Jan. 18.

ΒLOOMBERG