Trump Effect? U.S. Industrial Output Growth Reaches Highest Level in Four Years
In the two months since Trump won the election, U.S. industrial output has increased by a cumulative 1.5%, the largest increase since November 2021. Affected by cold weather, U.S. industrial output in January rose by 0.5% month-on-month, higher than the expected 0.3%, and the previous value was also revised upward. However, the manufacturing sector, which accounts for three-quarters of industrial output, showed slight weakness, declining by 0.1% month-on-month, below the expected growth of 0.1%
Data released on Friday showed that U.S. industrial production increased by 0.5% month-on-month in January, higher than the expected 0.3%, with the previous value revised from 0.90% to 1%. Year-on-year growth was 2%, the fastest increase since October 2022.
The main driver of January's industrial production growth came from the utilities sector. Data showed that utility output surged by 7.2%, marking the largest increase in three years. This growth was largely influenced by cold weather in January, leading to increased heating demand.
However, the performance of the manufacturing sector was somewhat weak. Manufacturing output fell by 0.1% month-on-month in January, below the expected growth of 0.1%. Considering that manufacturing accounts for three-quarters of total industrial output, this data undoubtedly casts a shadow over the recovery of the U.S. economy.
Despite the weak performance in manufacturing, capacity utilization rose for the second consecutive month, which somewhat alleviated concerns about an economic recession.
Additionally, it is worth mentioning that in the two months following President Trump's election victory, U.S. industrial output increased by a cumulative 1.5%, marking the largest increase since November 2021 and reaching the highest level since September 2022