Industrial production increased 0.2% in January 2015 following December’s 0.3% decline. Utilities and manufacturing output improved 2.3% and 0.2%, respectively, while mining production in January retreated 1.0% largely due to falling crude oil prices and the related slowdown in exploration and production. Total industrial production in January 2015 was 4.8% above the same month in 2014, with capacity utilization remaining at 79.7%, which is 0.7% below its 1972 to 2014 average.
The Purchasing Manager Index (PMI) for January dipped 1.6 ppts to 53.5%, with a value above 50 signifying expansion in the manufacturing industry. Participants’ views on the business environment were mixed, as the downturn in oil prices lowers input cost in some industries, but curtails investment in others. Meanwhile, the dock slowdown on the West Coast continues to impede imports and exports, as well as negatively impact inventories. January’s PMI reflects growth in 14 of 18 manufacturing industries including primary metals; fabricated metal products; petroleum & coal products; electrical equipment, appliances & components; transportation equipment; chemical products; and machinery.
The Consumer Confidence Index rose sharply in January 2015 to 102.9 from 93.1 in December 2014. Consumers’ attitudes on the labor market as well as overall current economic conditions improved considerably. The numbers of those expecting income raises have edged down, although fewer consumers are anticipating earnings reductions.
New orders for manufactured durable goods, down four of the last five months, declined 3.3% or $8.0 billion in December 2014 to $230.6 billion. New orders for transportation equipment in December led the drop, falling 9.1% or $6.7 billion to $66.8 billion. Shipments of manufactured durable goods in December reversed a downward trend and advanced 1.3% or $3.2 billion to $247.4 billion.
Per the fourth quarter advance estimate, real Gross Domestic Product (GDP) increased at an annual rate of 2.6% in Q4 2014, compared to 5.0% in Q3 2014. Q4 2014 gains were attributed to advances in personal consumption expenditures, private inventory investment, exports, nonresidential/residential fixed investment and state and local government spending. The slowing rate of real GDP growth was due to mounted imports, declines in federal government spending and decelerated growth in nonresidential fixed investment and exports.
In January 2015, the chemical and allied products PPI decreased to 268.0 from December’s reading of 276.3.