The Federal Reserve said Wednesday that industrial production — which includes factories, utilities and mines — slid 0.6 per cent in March, the biggest drop since a 1.1 drop in May 2009. For the first three months of the year, industrial output fell at an annual rate of 1 per cent, the worst quarterly performance since the first quarter of 2009 during the Great Recession.
"A steep fall in industrial production suggests the U.S. economy is going through its worst growth patch since early 2009," Chris Williamson, chief economist at Markit, wrote in a note to clients.
Factory output edged up 0.1 per cent in March, which was the first increase since November. But the gain was driven entirely by a 3.2 per cent increase in auto production. Factory production dropped 0.2 per cent in February after falling a revised 0.6 per cent in January — twice as much as the Fed originally reported.
Utility output dropped 5.9 per cent drop in March as temperatures rose and Americans didn't need to use as much heat.
Mining output fell 0.7 per cent last month, dragged down by a 17.7 per cent plunge in oil and gas drilling.
Economic growth has been unimpressive the past six months. The economy grew at a 2.2 per cent annual pace the last three months of 2014 and likely expanded no more than 1 per cent from January through March. But economists expect growth to pick up in the current April-June quarter, pulled higher by consumer spending.
Separately Wednesday, the Federal Reserve Bank of New York reported that its index of manufacturing activity in New York shrank in April for the first time in four months. Manufacturers have been struggling in recent months because a strong dollar has made their products more expensive in foreign markets and because a port strike on the West Coast disrupted shipments.Suggest a correction