Strong U.S. Industrial Output Bolsters Growth Picture
U.S. industrial production in January rose by the most in 14 months as manufacturing and utilities output increased, the latest sign the economy regained some ground early in the year. While other data on Wednesday showed a surprise decline in housing starts last month, that was probably because of bad weather, especially in the Northeast and Midwest regions of the country. With building permits ahead of groundbreaking activity, home construction is likely to pick up in the months ahead. The first increase in industrial output in five months should help allay the fears of a recession that have roiled the stock market and eliminated bets for an interest rate hike from the Federal Reserve in March. The chances of an increase in borrowing costs this year hang in the balance. Industrial production jumped 0.9 percent last month, the largest gain since November 2014, the Fed said. The increase followed a 0.7 percent decline in December and was boosted by a 0.5 percent advance in manufacturing output. Also, Minutes of the Fed’s Jan. 26-27 policy meeting published on Wednesday showed officials were concerned about slowing global growth and the equities rout, and considered changing their planned path of interest rate increases in 2016. Federal Reserve policymakers worried last month that a global slowdown and financial market selloff could hurt the U.S. economy and considered changing the central bank’s planned interest rate hike path for 2016.