**MNI 5 THINGS: US IP Rebound Stronger Than Expected, +1.1%>

--5 Things We Learned From Industrial Production Data

By Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

Industrial Production and Capacity Utilization data for February 

released by the Federal Reserve Friday: 

     - Industrial production came in much stronger than the +0.4% 

expected, surging up to 1.1%, and the strongest gain since 

post-hurricane fueled October's 1.6% gain. The two months prior had 

mixed strength, with January IP revised down to a 0.3% decline but 

December revised up to a 0.5% gain. 

     - With February's abnormally warm weather, utilities  was the one 

drag to IP, falling 4.7%. While this was a large decline it should be of 

little surprise, as it follows the trend between electric and gas 

utilties in IP and PPI home heating oil, as previewed by MNI's 5 Things.    

     - Manufacturing provided a boost, jumping 1.2% from January's 0.2% 

decline. The print follows the 0.5% surge in manufacturing hours worked 

reported in February's already released Employment Situation report. 

Interestingly this was the largest month/month gain for manufacturing 

hours since October 2017, when IP manufacturing posted a similar 1.3% 

rise - so today's print follows this trend closely.  

     - Capacity utilization came in at 78.1%, above the 77.8% expected,  

and breaking analysts' trend of overestimating February capacity 

utilization. This slightly larger print indicates a decline of economic 

slack, and is the highest reading since January 2015. However, it is 

still 1.7% below its long-run average. 

     - Mining surged 4.3% after January's revised down 1.5% decline. 

Analysts were surprised by January's fall last month as rig counts had 

climbed, but the rebound should set minds at ease. The Fed noted that 

the strength in February's print reflected strength in oil and gas 

sector and in coal mining.   

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