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FXstreet.com (Barcelona) - Paul Ashworth, Chief US Economist at Capital Economics notes that the 0.3% m/m gain in US industrial production is a lot better than it looks because the unseasonably warm weather last month led to a 4.8% m/m drop in utilities output, which subtracted nearly 0.5% from overall production.

He continues to explain that manufacturing output actually increased by a robust 0.8% m/m, with the gains spread across most categories. The pick of the bunch was motor vehicle output, which increased by 2.6% m/m. Mining output also increased by a solid 0.6% m/m.

Looking at the manufactured product breakdown, Ashworth notes that business equipment production increased by a healthy 1.3% m/m, which matches the rebound seen in capital goods orders overall the final couple of months of last year. He comments, "It appears that, against the odds, business investment enjoyed a rebound just at the time the fiscal cliff deadline was approaching."

He finishes by noting that, "The 0.1% m/m drop in consumer goods production is a little more worrying, but the 1.0% m/m increase in construction supplies suggests the housing recovery is helping. Overall, despite the downbeat survey evidence, the hard data suggests that the manufacturing sector is just about keeping its head above water."

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