- 21 March 2008 -
U.S. Industrial Production Falls in February

Industrial production dropped 0.5% in February, according to a newly released Federal Reserve report. The falloff, the sharpest decline in four months, was attributed to diminished output at the nation's mines, factories, and utilities—which ran at their slowest rate in more than two years.

The latest data on production were consistent with a sharply slowing economy that many analysts say may already be in recession. The capacity utilization rate, a gauge of how busy the nation's industries were, slowed to 80.9% in February from 81.5% in January. It was the slowest rate of overall capacity use since 80.7% in November 2005 and well under economists' expectations that businesses would run at an 81.3%.

The Fed said much of the unexpectedly steep fall in overall February production stemmed from a weather-related drop in utilities output, which plunged 3.7% after rising 2.2% in January. At the same time, the manufacturing sector also weakened. Production by manufacturing businesses fell 0.2% after being flat in January.

That left the manufacturing sector operating at its weakest rate since late 2005, at 79.3% of capacity compared with 79.6% in January. The last time the factory operating rate was lower was in October 2005 when it was at 79.2%.