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Cooling factory gains dampen US optimism

By Religare

American factories boosted production at a slower pace last month amid decelerating capital spending, signaling that growth likely slowed in the world's biggest economy in the final quarter of 2014 following the biggest expansion in more than a decade in the July-September 2014 quarter.

US factory output climbed by 0.3 per cent in December 2014 from the previous month, when it surged by 1.3 per cent, the Federal Reserve reported on Friday.


Analysts were expecting manufacturing production which makes up about three-fourth of US industrial output to rise by 0.2 per cent last month as utilities production slumped 7.3 per cent, the most since January 2006.

Manufacturing makes up about 12 per cent of the US economy.

Overall output at US mines, factories and utilities fell by 0.1 per cent in December 2014 from the previous month.

Output of consumer goods fell 1.1 per cent in December as softer wages cool household spending while business equipment growth slowed to 0.1 per cent as a slowdown in major global markets curbs demand for US factory goods.

A recession in Japan, a prolonged period of stagnation in Europe and a deepening slowdown in China may be curbing demand for overseas American goods, weighing on US factory growth.

Story first published: Monday, January 19, 2015, 9:20 [IST]
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