January U.S. industrial production data are out.

Industrial production unexpectedly fell 0.3% in January. Economists were expecting a 0.2% rise.

Capacity utilization slipped to 78.5% from December’s downward-revised 78.9% reading. Economists expected it to tick up to 79.3% from the prior 79.2% December estimate.

Manufacturing production tumbled 0.8%, missing estimates for a 0.1% gain and marking the worst drop since 2009.

Unseasonally cold weather played a role in the setback, according to the release. Below are a few sentences from the report highlighting weather concerns:

  • “Numerous motor vehicle assembly facilities lost one or more days of production during the month.”
  • “Extremely cold weather led to slowdowns at some oil and gas extraction facilities.”
  • “Output at electric and natural gas utilities surged 4.1 per cent on strong heating demand because of the extremely cold weather.”

“Industrial production usually bounces back after a period of bad weather, as postponed orders are completed,” says Paul Dales, a senior U.S. economist at Capital Economics.

“With the weather having been just as severe in February, however, this may not happen until March. But it will happen eventually. After all, the fundamentals have not changed. The outlooks for the domestic and global economies are still better than for some time.”

Click here for the full release »

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