Utility Surge Underpins IP Beat; Capacity Constraints Remain

A couple of highlights from January's stronger-than-expected industrial production report. Overall not a market-mover but continues to underpin the supply-side constrained inflationary narrative:

• "The increase of 9.9 percent in the output of utilities in January was the largest in the history of the index (since 1972) and reflected strength for both electric utilities and natural gas utilities." ... " after being held down in December by unusually mild weather, the demand for heating surged in January"
• Worth noting a few signs that supply pressures continue across the US industrial complex. January saw the highest industrial capacity utilization rate since March 2019 (and well above survey expectations).
• And "indexes for most market groups were above their year-earlier readings; some notable exceptions were automotive products, transit equipment, and consumer parts, all of which were substantially lower than at the beginning of last year because of the ongoing shortage of semiconductor chips that has impeded vehicle assemblies."