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Industrial output in US falls for 4th month

INDUSTRIAL production fell last month for the fourth consecutive month as auto cutbacks and collapsing exports hurt the broader United States economy.

Output at factories, mines and utilities dropped 1.4 percent last month, more than forecast, after a revised 1.9-percent decline in January, the Federal Reserve said yesterday in Washington. The amount of factory capacity in use slumped to 70.9 percent, matching the lowest level on record.

The worst financial crisis in seven decades has choked off credit to consumers and businesses worldwide, leading to a slump in sales of cars, houses, airplanes and computers. Boeing Co and United Technologies Corp are among companies that have announced thousands of jobs will be cut to trim costs as the global economy contracts.

"The industrial sector is still struggling with a glut of inventories and both employment and production are likely to continue to fall," said Zach Pandl, an economist at Nomura Securities International Inc in New York. "We're not out of the woods yet."

Economists forecast industrial production would drop 1.3 percent, according to the median projection in a Bloomberg News survey of 68 economists. Estimates ranged from declines of 2.2 percent to 0.3 percent.

In the 12 months ended last month, industrial output fell 11.2 percent, the biggest year-on-year decline since 1975.

Fastest pace

Another report yesterday showed manufacturing in New York State contracted this month at the fastest pace on record as orders, sales and inventories plunged. The Fed Bank of New York's general economic index dropped to minus 38.2, the lowest level since data began in 2001, from minus 34.7 last month.

The proportion of plants in operation matched the December 1982 reading as the lowest since data began in 1967. Economists had forecast figure would fall to 71 percent, according to a separate Bloomberg survey.

Factory output, which accounts for about four-fifths of industrial production, shed 0.7 percent, led by declines in furniture, appliances, machinery and computers.

Motor vehicle and parts output rose 10 percent last month after plummeting 25 percent the prior month, the report said.

Auto makers assembled cars and light trucks at an annual rate of 4.73 million in the month, second only to the 3.83 million assembled in January as the weakest since records began in 1967.


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