Industrial production for February returned to the negative column in a Fed report today on Production and Capacity Utilization. It’s down 0.5% from January.

In the past 14 months industrial production has only been up twice. Last month, January, was one of those months. In January, colder than normal weather spurred a surge on utilities. The January surge of +0.9%, today revised to +0.8% is in relation to a dip of 0.7% in December (now revised to -0.5%).

As with most bureaucratic reporting, significant revisions are the norm.

The Bloomberg Econoday Consensus was for a decline of 0.2%, overoptimistic as usual.

Industrial production fell 0.5 percent in February but includes a respectable and higher-than-expected 0.2 percent gain for manufacturing production which pulls this report to the positive column for the economic outlook. The utility component, down 4.0 percent in February after rising 4.2 percent in January, is very volatile reflecting month-to-month swings this time of year in heating demand. The mining component, down again at minus 1.4 percent, has been weak for the last year reflecting the price collapse for commodities.

But the manufacturing component is the telling component with strength belying broad weakness in regional surveys and pointing perhaps to better-than-expected output for the first quarter. Vehicles have been a center of strength for manufacturing, though production here did slip 0.1 percent in the month, while business equipment is suddenly showing life, up 0.6 percent for a second straight month. The gain for this component hints at a revival for business investment.

Capacity utilization overall is down 0.4 percentage points to 76.7 percent though manufacturing capacity, again the reading to focus on, is unchanged at 76.1 percent. The factory sector has been getting pulled back by weak exports and weak demand for energy equipment though this report, together with positive indications in yesterday’s Empire State report, do suggest, or at least offer the hint, that the worst may over.