US industrial output falls to 2002 low
US industrial production fell for the fourth consecutive month in February, to a 2002 low, as the manufacturing sector reeled from recession, government data showed Monday.
A separate report on manufacturing in the state of New York showed a steep deterioration in conditions in March, signaling further pain for the country's battered manufacturing sector.
The Federal Reserve reported industrial production fell a seasonally adjusted 1.4 percent from January, slightly more than analysts' consensus forecast of a 1.3 percent drop.
Industrial output, at its lowest level since April 2002 in February, was 11.2 percent lower than a year ago.
"The monthly numbers are erratic but the trend is clearly downwards," said Ian Shepherdson, chief US economist at High Frequency Economics.
"There is no relief in sight as inventories rocket and exports plunge."
The Fed's industrial output index last rose in October and has fallen a combined 6.8 percent in the past four months.
The index has declined for 10 of the past 12 months.
The Federal Reserve central bank said that the capacity utilization rate dropped to 70.9 percent in February, slightly below the consensus 71.0 percent, from a revised 71.9 percent in January.
The February industrial capacity utilization reading was 10 percentage points below its average in the 1972-2008 period and matched a historical low in December 1982, during a severe recession, the Fed noted. The data has been tracked since 1967.
"If anyone is worried about bottlenecks forming when the economy eventually rebounds, forget it. Manufacturing capacity utilization is as low as we have seen it except during the steep recession in the early 1980s," said Joel Naroff at Naroff Economic Advisors.
Manufacturing production, excluding mining and utilities, declined in February for the fourth straight month, by 0.7 percent. On a 12-month basis, manufacturing was down 13.7 percent.
"After falling to a historical low in January, the factory operating rate, which dates back to 1948, moved down an additional 0.5 percentage point in February, to 67.4 percent," the Fed said.
An increase in auto and auto parts production in February after plant shutdowns in January offset the manufacturing decline by nearly a half percentage point, the central bank said.
Mining output dipped 0.4 percent in February, and output in the utilities sector plunged 7.7 percent, in part due to above-average temperatures that lowered energy demand.
Separately, the Federal Reserve Bank of New York said its monthly survey of manufacturers in New York state showed conditions "deteriorated significantly in March."
The overall Empire State index fell 3.5 points to a fresh low 38.2 points, while new orders and shipments indexes also fell to record lows.
Naroff said the early data on March activity was "pretty ugly" and noted that "with orders continuing to dwindle, it is hard to see that a bottom may be forming."