U.S. industrial output rises on gains in manufacturing, mining

WASHINGTON, (Reuters) - U.S. industrial production jumped 1.1 percent in February, the largest increase in four months, due to a weather-related rebound in construction and a rise in output from the nation's oil and gas fields and mines.

Manufacturing output rose 1.2 percent, the biggest gain since October, the Federal Reserve said in its monthly report.

Economists polled by Reuters had forecast a 0.3 percent rise in industrial production. Output for January was revised down to a decline of 0.3 percent from the previous 0.1 percent drop.

The U.S. central bank's measure of the industrial sector comprises manufacturing, mining, and electric and gas utilities.

February's increase in output was driven by a 2.3 percent rise in construction supplies and a recovery in the output of business equipment, which had stalled in the prior three months.

The utilities index fell nearly 5 percent after a wave of unseasonably warm weather reduced demand for heating.

Manufacturing output edged up 1.2 percent and mining production surged 4.3 percent.

In the 12 months through February overall industrial output rose 4.4 percent.

The percentage of industrial capacity in use rose 0.7 percentage point in February to 78.1 percent, the highest since January 2015.

Fed officials look to capacity use as a signal for how much further the economy can accelerate before sparking higher inflation.

(Reporting by Howard Schneider; Editing by Paul Simao)

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