US industrial production roared back in January

US industrial production grew more than expected in January, the Federal Reserve reported Wednesday, amid a surge in heating demand and strong mining activity.

The 1.4 per cent increase last month came after a slight decline in December, and was helped by a 9.9 per cent surge in the utilities index as weather grew colder across the United States, the largest-ever jump in its history.

Mining saw a one percent increase that was in large part due to a 6.2 per cent rise in oil and gas drilling, though it remains below its pre-pandemic level, according to the Fed.

Manufacturing output was up a more modest 0.2 per cent amid growth in most manufacturing sectors, though motor vehicles and parts production declined as automakers struggled to find semiconductors, as did coal and petroleum products.

Oren Klachkin of Oxford Economics predicted a  "solid year" ahead for industrial production, as manufacturers see continued demand and oil and gas producers benefit from higher prices.

"The biggest question facing the industrial sector is how quickly will supply chain and hiring headwinds dissipate," he wrote in an analysis.

"We expect these challenges to diminish slowly as the economy learns to live with Covid. However, even if the virus disappeared overnight, it would take a while for supply chains to completely heal."