Preview: Due February 18 - U.S. January Industrial Production - Positive signals, but risks from weather
We expect a 0.5% increase in January industrial production, with ISM manufacturing and manufacturing payrolls suggesting stronger data, though there is some downside risk from bad weather late in the month.
January’s non-farm payroll showed aggregate manufacturing hours worked up by 0.3% with a 0.6% rise for production and non-supervisory workers, making our forecast for a 0.5% rise in manufacturing output not an aggressive one, though the payroll was surveyed before the bad weather hit. ISM manufacturing data saw a sharp bounce in January.
We expect a neutral contribution from autos while payroll data suggests a moderate rise in mining, we expect by 0.5%. We expect a 0.8% increase in utilities, not quite enough to lift overall production above 0.5%. Weekly electrical output data shows a sharp rise late in the month as the bad weather hit but before that weakness in utilities output was being signaled.
We expect capacity utilization to increase to 76.6% from 76.3%, which would be the highest since June 2024. We see manufacturing at 75.9% from 75.6%, a level that was matched in September and July of 2025 but has not been exceeded since June 2024.
