Output at U.S. factories increased unexpectedly in February for a second month, representing a respite for a manufacturing sector that has been sluggish amid rising economic uncertainty.
The 0.1% gain in factory production last month followed an upwardly revised 1.3% advance in January, according to Federal Reserve data released Friday. Including mining and utilities, total industrial output was unchanged in February.
The median forecast in a Bloomberg survey of economists called for manufacturing production to decline 0.3% and for total output to rise 0.2%.
Consecutive gains in goods production suggest firmer economic growth in the first quarter, helped by improving supply chains and a rebound in orders. Nonetheless, the outlook for factory activity will be tested by rising borrowing costs, sluggish overseas economies and elevated inventories.
The figures follow a separate Institute for Supply Management report earlier this month that showed a gauge of factory activity improved for the first time in six months despite remaining largely depressed.
The Fed data showed capacity utilization at factories, a measure of potential output being used that can correlate with inflation pressures, eased to 77.6%.
The gain in manufacturing output last month reflected increases in computers and electronics, chemicals and wood products. Motor vehicle output fell for the third time in the last four months.
By market group, output of consumer goods increased, reflecting a gain in energy. However, production of consumer durable goods, such as autos, fell and business equipment output slipped.
Utility output rose 0.5%, while mining fell 0.6%. Oil and gas well drilling slid 3.1%.
Information for this article was contributed by Reade Pickert and Chris Middleton of Bloomberg News (WPNS).