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P.M. BRIEFING : Factory Output Highest Since 1979

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<i> From Times wire service</i> s

The nation’s factories, mines and utilities in January operated at 84.4% of capacity, a level that has not been surpassed for nearly a decade, the government reported today.

The Federal Reserve Board said January’s operating rate was unchanged from December, for which the figure was revised upward from an earlier estimate of 84.2%.

The operating rate for January and December has not been surpassed since October, 1979, when factories were functioning at 84.6% of capacity.

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As capacity use rises, so do fears that factories will have trouble keeping up with orders, leading to shortages and price increases and adding to inflationary pressures.

The Fed since last March has been nudging interest rates upward in an effort to slow the economy and keep inflation in check.

In a second report today, the Federal Reserve said industrial production climbed 0.3% in January following a revised increase of 0.5% in December.

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A pickup in the production of both manufacturing and commercial equipment during the month more than offset a decline in output of transit equipment.

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