The broader markets were off to a brutal start in 2016. All the major benchmarks slipped into correction mode due to the oil price rout and global growth fears. The minutes of the Federal Reserve’s January two-day policy meeting also saw ’downside risks’. However, unlike the markets, the U.S. economy isn’t tanking.

The struggling manufacturing sector received a much needed boost after industrial production climbed north. Moreover, consumers are willing to go out and make sizeable purchases. This is heartening news since growth in industrial output and rise in consumer spending levels constitute almost more than two-thirds of U.S. economic growth.

Hence, chances are that these underlying strengths will give the U.S. economy a push despite risks lurking around. Also, the Atlanta Fed and major financial behemoths expect the country’s first quarter GDP growth rate to escalate. Investors should cash in on this by buying stocks that are not only fundamentally strong but also are poised for growth in the near term.

Let us now take a look at the underlying strengths in some details:

Industrial Output Bolsters Growth Picture

The manufacturing sector was feared to have slunk into recession due to a stronger dollar, weak global economy and a continuous slump in oil prices. However, thanks to an increase in production in utilities and manufacturing, industrial output gained 0.9% in January, the largest gain since Nov 2014, according to the Federal Reserve. Moreover, industrial production increased for the first time since July.

Manufacturing production rose 0.5% last month, its biggest gain since July. A solid gain of 2.8% in the output of motor vehicles and parts was cited to be the major reason behind this uptick in manufacturing production. According to Steve Murphy, economist at Capital Economics, the gain may not look much, but “it is a lot better than the ‘collapse’ it is often characterized to be.” Utility output also increased 5.4% in January, while overall capacity utilization by the industrial sector gained 0.7 percentage point to 77.1%.

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