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US manufacturing output grows modestly, hit by auto decline

A worker builds a Victory Cross Country motorcycle at the Polaris Industries factory in Spirit Lake, Iowa.
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A worker builds a Victory Cross Country motorcycle at the Polaris Industries factory in Spirit Lake, Iowa.

U.S. manufacturing output rose modestly in January and not at all in December, potentially worrisome signs for the U.S. economy given the recent strength in the dollar and weaker overseas markets.

Factory output edged up 0.2 percent last month, the Federal Reserve said on Wednesday. The data showed flat output in December, a downward revision from a previous estimate of 0.3 percent growth.

The output reading comes after several months in which factory manager sentiment surveys have pointed to a slowdown in growth.

Economists polled by Reuters had forecast manufacturing output rising 0.3 percent in January.

Total factory output was dragged lower by a 0.6 percent drop in auto output. Production also fell for food, beverages and tobacco.

Mining output dropped 1 percent, a potential sign of the impact of recent drops in drilling and well-servicing activity brought on by lower oil prices.

Overall industrial production rose 0.2 percent, which was entirely due to an increase in output by utilities.