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First Cut: January industrial production declines on manufacturing, mainly in motor vehicles

The January Industrial Production Index declined 0.6% from December after a revised up 0.1% in December from November (previously up 0.3%) and up 0.6% in November from October (previously up 0.4%). Compared to a year-ago, overall production was up 1.6%.

The index was down due to a drop in manufacturing (down 0.9%) that was only partially offset by a minimal increase in mining (up 0.1%) and modest rise in utilities (up 0.4%).

Manufacturing was lower in January mainly due to a sharp decline for motor vehicles and parts (-8.8%) although other categories were down as well. Excluding motor vehicles, manufacturing was down 0.3%.

Mining was little changed in January after two strong months, probably related to the flattening out in oil prices that no longer encouraged extraction of crude as demand dipped.

Utilities increases were driven by increases in natural gas (up 6.0%) during a period when heating demand jumped while electricity demand was lower from industry (-0.5%).

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