February 15, 2003	Saturday	Zul Hijjah 13, 1423

WASHINGTON, Feb 14: US industrial output posted a stronger-than-expected rebound in January, boosted by renewed auto production, the Federal Reserve said in a report on Friday.

Output at the nation’s factories, mines and utilities rose 0.7 per cent, the Fed said, its best reading since July and reversing December’s revised 0.4 per cent drop. Manufacturing, which makes up more than four-fifths of overall production, posted a 0.5 per cent increase, the largest gain in a year.

“Much of the gain in manufacturing output in January reflected an increase in the production of motor vehicles,” the Fed said.

Businesses were also running closer to full capacity in January, though capacity in use remained at relatively low levels by historic standards. Overall capacity use rose to 75.7 per cent in January from 75.2 per cent in December, the Fed said.

Analysts polled by Reuters had projected production to rise by only 0.3 per cent and capacity in use to rise to 75.6 per cent.

The Fed report was the latest positive reading for the embattled factory sector, which has been especially hard hit during the economy’s slowdown. According to the Labour Department, the sector shed 16,000 workers in January. A separate index compiled by the Institute for Supply Management showed manufacturing expanded for a third straight month in January.

According to the Fed, auto production rose 4.9 per cent in January, partially rolling back a 5.3 per cent drop in December. Auto assembly rates rose to a seasonally adjusted 12.88 million unit annual rate, after having dipped to an 11.91 million pace in December.

Industrial production outside the auto sector was less vigorous, posting only a 0.4 per cent gain.

Among other sectors tracked in the report, mining activity fell 1.2 per cent, while output at utilities rose 4.0 per cent, aided by gains in demand for electricity and natural gas.

BANKRUPTCIES: US bankruptcy filings climbed to a record level in 2002, a US court administrative agency said on Friday, as job losses and the weak economy hurt the finances of more people.

The number of individuals and businesses asking courts for relief from their debtors rose 5.7 per cent from 2001 to 1.58 million, the Administrative Office of the US Courts said in a statement.

Non-business filings made up more than 97 per cent of cases filed in 2002. Business bankruptcy filings fell by 1,559 cases in the year.

Bankruptcy experts have said recently that greater availability of credit and the sluggishness of the US economy are causing more people to seek legal protection from their creditors. Bankruptcy lawyers and scholars say they have noticed more repeat filings and younger and older filers than in the past.

Many of these filers have levels of credit card debt that experts say would have been unimaginable 10 years ago.

Another expanding category of bankruptcy is among people who exhaust their finances paying bills for a serious illness in the family, experts say.

US consumer sentiment, a harbinger of consumer spending, slumped in early February, according to a University of Michigan survey released on Friday.

The consumer sentiment index fell to 79.2 in the first reading for February from 82.4 in January, market sources said.

The fall was larger than expected. A consensus forecast of Wall Street economists polled by AFX News called for the consumer sentiment index to fall slightly to 82.0.

A final reading for Feb will be released on February 28.—Reuters/AFP