The 0.1% U.S. January industrial production drop
The 0.1% U.S. January industrial production drop after downward revisions left a weaker than expected report, though Q4 data still show big industrial production gains before the January downtick. Analysts saw the expected January weather-boost for utilities to a new record-high, but analysts saw an odd 1.0% January drop for mining output, and downward revisions to the Q4 manufacturing data before a January weather-hit. Beyond the weak start, analysts expect an early-2018 climb for the index, given strength in the producer sentiment and factory reports. Analysts expect a 2.0% growth rate for industrial production in Q1 after the robust 8.3% (was 8.2%) Q4 clip that marked the strongest quarter since Q2 of 2010. Analysts previously saw a hurricane-depressed 1.2% (was 1.3%) drop in Q3, but a solid 5.6% pace in Q2. The factory sector will outperform GDP in 2018, with estimated gains of 3.3% for industrial production and 3.0% for real GDP, after respective 2017 gains of 2.0% and 2.3%. Over the prior two years the petro-recession prompted a big underperformance for industrial production relative to GDP, with respective rates of -1.2% and 1.5% in 2016 and -0.7% and 2.9% in 2015.