U.S. industrial output rises 0.9 percent in January

WASHINGTON (Reuters) - U.S. industrial production rose in January after three straight months of declines, buoyed by a strong utilities index and growing manufacturing sector.

Industrial output increased 0.9 percent after a downwardly revised 0.7 percent decline in December, the Federal Reserve said on Wednesday. The U.S. central bank had previously reported a 0.4 percent drop for December.

Economists polled by Reuters had forecast industrial production rising 0.4 percent last month.

The industrial sector measured by the Fed comprises manufacturing, mining, and electric and gas utilities.

A massive blizzard in the northeastern United States late in January likely held down production by a small amount, the Fed said, but it was also boosted by a marked rise in demand for heating after what had been an unseasonably warm winter.

The utilities index rose 5.4 percent last month, following a 2.9 percent drop the month before.

The rise in output also reflected a 0.5 percent increase in manufacturing. Analysts had expected manufacturing to tick up 0.3 percent, according to a Reuters poll.

The mining index was flat last month and down 9.8 percent from the same period a year ago.

With output on the rise, the percentage of industrial capacity in use rose to 77.1 percent from a downwardly revised 76.4 percent in December.

The Fed views capacity use as a leading indicator in deciding how much further the economy can grow before sparking higher inflation.

(Reporting by Megan Cassella; Editing by Paul Simao)

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