Factory production declined in January 2014, despite a gain in December 2013. The 0.8 decrease is the biggest decline since May 2009, according to the Federal Reserve.
The decrease in January is a bit of a surprise as December posted an increase of 0.3 percent. Total industrial production also saw a drop of 0.3 percent, even though utility output showed gains over the past month. The drop in industrial production during January was the largest since April 2013. In a survey conducted by Bloomberg, economists believed the activity for industrial production would range from a decrease of 1.4 percent to an increase of 0.7 percent. Guy Berger, a U.S. economist at RBS Securities Inc., said in an interview with Bloomberg this is just a small blip on the radar.
"Our assumption is that this is a temporary soft patch," Berger said. "You've had pretty moderate growth in manufacturing, and I think in all likelihood that's what's going to repeat in 2014. It's important not to overreact to the weakness that you're seeing now."
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