Factory production tumbles by largest margin since 2009

posted at 10:41 am on February 14, 2014 by Ed Morrissey

Earlier today, the Fox News poll showed economic pessimism dominating the electorate. The new report from the Federal Reserve on industrial output in January validates rather than combats that trend. Factory production fell 0.8% last month, the sharpest drop in nearly five years, which the Fed blames at least in part on the weather. The decline went against market expectations, and includes a downward revision for December:

Factory production in the U.S. unexpectedly declined in January by the most since May 2009, adding to evidence severe winter weather weighed on the economy.

The 0.8 percent decrease at manufacturers followed a revised 0.3 percent gain the prior month that was weaker than initially reported, figures from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.1 percent advance. Total industrial production dropped 0.3 percent even as utility output climbed the most in almost a year.

Assembly lines slowed last month as colder weather tempered production, the Fed said, showing a pause in the momentum of an industry that’s helped bolster the economy. A pickup in capital spending and faster hiring that drives consumer purchases will be needed to spur production gains.

The difference between the factory production number and overall industrial production was demand for energy, according to CNBC’s analysis — also due to the weather:

The drop in factory output and a 0.9 percent fall in mining weighed on overall production, which fell 0.3 percent in January, the biggest drop since April.

Production at the nation’s mines, factories and power plants had increased 0.3 percent in December.

But freezing temperatures boosted demand for heating last month, causing utilities production to jump 4.1 percent.

Josh Boak at AP notes that the miss in factory orders may be a dramatic outlier, but the trend isn’t impressive anyway:

Factory output rose a modest 1.3 percent over the past 12 months. …

The Institute for Supply Management, a trade group of purchasing managers, reported earlier this month that its index of manufacturing activity fell to 51.3 in January from 56.5 in December. It was the lowest reading since May, although any reading above 50 signals growth.

Factory orders also fell 1.5 percent in December, according to the Commerce Department. That could have contributed to less output in January.

The figures suggest that U.S. manufacturing is slowing after strong gains at the end of last year. Auto sales approached 15.6 million last year but buying has since decelerated. Businesses are spending cautiously on machinery and other large factory goods. The slowdown means that economic growth in the first three months of this year will probably come in significantly below the strong 3.6 percent annual pace in the second half of 2013.

Rick Santelli calls all of these numbers “a big miss” for CNBC:

Basically, this is just another indication of cyclical stagnation, complicated in part by the weather, which is a legitimate consideration. The slowdown isn’t just weather-related, and it leaves us pretty much where we’ve been in for nearly five years of the Obama “recovery.” As Bloomberg notes, we need more incentives to hire and work in order to boost economic growth past the stagnation level, but instead we’re supplying disincentives to both — and cheering them as progress. This is the inevitable result.


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Less production, fewer sales, fewer jobs – features, not bugs, of the ObamiNation.

Steve Eggleston on February 14, 2014 at 10:43 AM

Unexpected, I’m sure.

Eren on February 14, 2014 at 10:44 AM

“Somebody’s gotta give up their pie for others to have pie”–Michelle “Did ya see my $12,000 dress?!” Obama

vityas on February 14, 2014 at 10:45 AM

“Who needs private enterprise when the government can provide for all your needs.”
/The Left

Bitter Clinger on February 14, 2014 at 10:46 AM

I just hope the weather warms up before the first Obama-town appear box villages of homeless unemployed open up.

MTF on February 14, 2014 at 10:46 AM

What…machines stop operating in cold weather??

PattyJ on February 14, 2014 at 10:47 AM

Bush…still causing problems is he?

right2bright on February 14, 2014 at 10:47 AM

We need more government intervention. Meanwhile, let’s prop up the Dow.

/

BuckeyeSam on February 14, 2014 at 10:47 AM

I’m wondering when the rotted infrastructure supporting the lies finally begins to give way and collapse into the economic abyss that awaits us.

Art Vandelay on February 14, 2014 at 10:49 AM

What…machines stop operating in cold weather??

PattyJ on February 14, 2014 at 10:47 AM

Air conditioners? Bathing suit manufacturers…fishing boats…I don’t think much of our “economic” base is limited by cold weather…convertible cars?

right2bright on February 14, 2014 at 10:50 AM

Damn that George W Bush! Why does he keep screwing up the economy nearly 6 years after leaving office?

ConstantineXI on February 14, 2014 at 10:50 AM

The big lie of 2013 was ‘If you like your insurance, you can keep your insurance, period’.

The big lie for 2009, 2010, 2011, 2012, and likely for 2014 is calling what Obamaonomics has delivered an ‘economic recovery’.

This is an Administration that doesn’t want to let a crisis go to waste, so they have been doing all they can to create and fuel an economic crisis. A means to achieve a desired end.

Athos on February 14, 2014 at 10:50 AM

I just hope the weather warms up before the first Obama-town appear box villages of homeless unemployed open up.

MTF on February 14, 2014 at 10:46 AM

You’re more caring than I.

bigmacdaddy on February 14, 2014 at 10:51 AM

I’m wondering when the rotted infrastructure supporting the lies finally begins to give way and collapse into the economic abyss that awaits us.

Art Vandelay on February 14, 2014 at 10:49 AM

Wouldn’t it be poetic if a 100 yard sinkhole opened up under the Spite House and swallowed it?

ConstantineXI on February 14, 2014 at 10:51 AM

As the Bible says that we’ll always have the poor, I believe that we’ll always have the Left.

The fence-post-sitting middle of the country needs to decide whether it wants the Left’s version of the country for the next generation or two before doing something about. If being a pathetic and effete country is desirable, let’s have more of the Left.

For me, I want the Left marginalized as much as possible.

BuckeyeSam on February 14, 2014 at 10:53 AM

Free from job lock!

Murphy9 on February 14, 2014 at 10:57 AM

Your factories have been liberated by the Red Army! Hoooorah!

On the bright side, less manufacturing activity will mean that the proletariat has more free time to pursue their true desires. Imagine all the great proletarian poetry that will flower in this age of less work, and more leisure.

Also, less greenhouse gases, so we can stem the tide of those rising seas. Its like killing two birds with one stone. Oh wait, the temperature here in Chicago has been below freezing for over two straight weeks.

stopitchris on February 14, 2014 at 10:57 AM

Item #2324 in the list of “Things that would get a Republican President hounded to death in the media and/or impeached.”

And just coincidently, also #2324 in the list of “Things you will never read in the newspaper or hear on the evening news from the alphabet networks.”

Ray Van Dune on February 14, 2014 at 10:58 AM

Free at last,
Free at last,
Praise Lord Obama, we’re free from work at last!

Ray Van Dune on February 14, 2014 at 11:00 AM

Factory production in the U.S. unexpectedly declined in January by the most since May 2009 …

They mock themselves …

ShainS on February 14, 2014 at 11:02 AM

As Bloomberg notes, we need more incentives to hire and work in order to boost economic growth past the stagnation level, but instead we’re supplying disincentives to both — and cheering them as progress. This is the inevitable result.

A clear goal of this Administration is to expand the welfare state.

Expanding the welfare state is more than just expanding the programs funding…one has to create the environment where the need has expanded creating a gap that must be filled by a caring and compassionate government.

As noted by Steve in the opening comment, what we’re seeing is a feature, not a bug of the economic policies of this Administration. The economy, if not micromanaged, will sort itself out after a recession and grow. What little growth we’ve seen is despite of the Administration’s efforts, not because of them. And the consequences are all intended – all part of ‘fundamental change’.

Athos on February 14, 2014 at 11:03 AM

Millions will regain employment once a certain man loses his.

turfmann on February 14, 2014 at 11:03 AM

Factory production tumbles by largest margin since 2009


Green shoots!!

And another Recovery Summer is just around the corner.

“At some point you’ve manufactured enough.”

ThePrimordialOrderedPair on February 14, 2014 at 11:04 AM

Dem Spin:

“This is actually good news because the people who are not working can stay home and make babies on the taxpayer’s dime, put them on food stamps, WIC, Medicaid and Section 8 (free housing!). This will increase the population and this will result in the need for more goods and services. So, rejoice, Murca! Obama Got Dis Handle.”

/Obamalogic

Key West Reader on February 14, 2014 at 11:05 AM

ObamaDepression

Left_is_Wrong on February 14, 2014 at 11:06 AM

Good news! More people freed from job lock!

:boggle at progressive logic:

xNavigator on February 14, 2014 at 11:07 AM

In the Magical World of King Obama…stuff just appears when you want it to like Star Trek…

workingclass artist on February 14, 2014 at 11:07 AM

In a sickening sense any news, good or bad, that deflects attention from Obamacare is looked upon by Barry as a good thing.

Appalacher on February 14, 2014 at 11:07 AM

Just shows, liberalism is a mental disorder.

Ta111 on February 14, 2014 at 11:08 AM

What…machines stop operating in cold weather??

PattyJ on February 14, 2014 at 10:47 AM

Air conditioners? Bathing suit manufacturers…fishing boats…I don’t think much of our “economic” base is limited by cold weather…convertible cars?

right2bright on February 14, 2014 at 10:50 AM

Here in New England fishing boats go out all winter.

Del Dolemonte on February 14, 2014 at 11:12 AM

Is the Treasury Dept going to demand oaths of loyalty from manufacturers that they aren’t reducing production because a black man is president?

gwelf on February 14, 2014 at 11:18 AM

Making “You didn’t build that” a self-fulfilling prophecy, one business and industry at a time …

ShainS on February 14, 2014 at 11:18 AM

A house of cards.

Punchenko on February 14, 2014 at 11:23 AM

Is the Treasury Dept going to demand oaths of loyalty from manufacturers that they aren’t reducing production because a black man is president?

gwelf on February 14, 2014 at 11:18 AM

Whereas, I swear on my oath as an ordinary citizen of these United States, I do not like the man in the WH, not because he is darker than I in pigmentation, but because he is a moron.

So say I.

Sworn this day, February 14 2014

Scrumpy on February 14, 2014 at 11:24 AM

Whereas, I swear on my oath as an ordinary citizen of these United States, I do not like the man in the WH, not because he is darker than I in pigmentation, but because he is a moron.

So say I.

Sworn this day, February 14 2014

Scrumpy on February 14, 2014 at 11:24 AM

HERE HERE! Signed.

Left_is_Wrong on February 14, 2014 at 11:43 AM

Bush…still causing problems is he?

right2bright on February 14, 2014 at 10:47 AM

Yes he is and I wish you smart-alecks would quit insinuating Bush had nothing to do with our current economic problems. He and his party crippled the economy with dramatic increases in inflation financed spending, which pushed up unemployment, precipitated the financial crisis and opened the door to Obama and his party to come in and continue with more of the same. And Obamacare looms to do much more damage. I certainly do not miss Bush.

rickv404 on February 14, 2014 at 11:52 AM

I’m sure the decline in numbers is due to the bad weather global warming we are experiencing! Never before in January in this country have we ever experienced cold weather like this. /sarc

RUReadingthis on February 14, 2014 at 12:46 PM

Ain’t Obamanomics wonderful? I predict 3 more years of stagnation under King Barack the Magnificent.

Elect an empty suit, get an empty suit.

GarandFan on February 14, 2014 at 12:58 PM

Don’t worry… I hear that production of poetry is way up…

dpduq on February 14, 2014 at 1:04 PM

What’s that word again?

Oh yeah, “Winning!”

climbnjump on February 14, 2014 at 1:18 PM

The weather may have been a legitimate consideration in January, but it does not explain the downward revision in December. Let’s face it, it’s just another chapter in Obama’s five year economic recovery.

ThePainfulTruth on February 14, 2014 at 1:33 PM

“Hooray for our evolving freedom from ‘Factory ProductionLock!’”

—Nanners Pelosi, Chief Progressive (re)Interpreter

orangemtl on February 14, 2014 at 4:44 PM

Yes he is and I wish you smart-alecks would quit insinuating Bush had nothing to do with our current economic problems. He and his party crippled the economy with dramatic increases in inflation financed spending, which pushed up unemployment, precipitated the financial crisis and opened the door to Obama and his party to come in and continue with more of the same. And Obamacare looms to do much more damage. I certainly do not miss Bush.

rickv404 on February 14, 2014 at 11:52 AM

Blah, blah, blah. You miss the Big Flick. The problem is statism and BOTH PARTIES are merely two sides of the same coin.

307wolverine on February 14, 2014 at 5:06 PM

Blah, blah, blah. You miss the Big Flick. The problem is statism and BOTH PARTIES are merely two sides of the same coin.

307wolverine on February 14, 2014 at 5:06 PM

ahhh shove it.

WryTrvllr on February 14, 2014 at 9:52 PM