US output fall signals halt to GDP growth
Print Edition
US industrial production fell more than expected in March as manufacturing and mining production decreased, the latest indication that economic growth braked sharply in the first quarter.
Industrial output shed 0.6 percent last month after a downwardly revised 0.6 percent drop in February, the Federal Reserve said yesterday. Industrial production has fallen in six of the last seven months.
Economists polled by Reuters had forecast industrial production slipping only 0.1 percent last month after a previously reported 0.5 percent drop in February.
Industrial production fell at an annual rate of 2.2 percent in the first quarter after dropping 3.3 percent in the fourth quarter. The report joined data on retail sales, business spending, trade and wholesale inventories in suggesting that economic growth slowed to crawl at the turn of the year.
Growth estimates for the first quarter are as low as a 0.2 percent annualized rate. The economy grew 1.4 percent in the fourth quarter. But given a buoyant labor market, the ebb in growth is likely to be temporary.
The industrial sector has been undermined by a slowing global economy and robust dollar, which have eroded demand for US manufactured goods. It is also being weighed down by lower oil prices that have undercut capital investment in the energy sector, as well as an inventory correction.
But there are signs the worst of the industrial sector downturn is over, with recent manufacturing surveys turning higher. In addition, the dollar’s rally has fizzled and oil prices appear to be stabilizing.
Last month, manufacturing output fell 0.3 percent, the biggest decline since February 2015, after slipping 0.1 percent in February. Manufacturing was dragged down by motor vehicle and parts production, which fell 1.6 percent after rising 0.8 percent the prior month.
For the first quarter, manufacturing output rose 0.6 percent. In March, there were also decreases in the output of electronic equipment, appliances and components.
Mining production tumbled 2.9 percent as oil and gas well drilling plummeted 8.5 percent after diving 15.8 percent in February.
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