U.S. factories slowed production in January following two solid months of manufacturing, the Federal Reserve (Fed) said Friday. According to the central bank, manufacturing output declined 0.4 percent in January from December. The drop followed increases of 1.1 percent in December and 1.7 percent in November. Overall, industrial production fell 0.1 percent last month compared to December. Output in mining, the category that covers oil and gas drilling, dropped 1 percent. Utility output jumped 3.5 percent, as a cold snap led more households to turn up the heat. Factory output, which is the most important component of industrial production, was brought lower by a steep 3.2 percent decline in auto and auto parts production. However, sales of autos continue to rise, so production will likely rebound in February. Many factories outside the auto industry have been affected by a slowdown in consumer spending and weaker global growth that has dampened demand for U.S. exports. Economists say they expect a healthier output in 2013, partly because U.S. companies are sitting on large amounts of cash and appear poised to invest some in equipment and machinery. Economies in Europe are also healing, and growth in Asia is expected to improve.
