Factory Production Falls Unexpectedly in March

“Factory production in the U.S. unexpectedly dropped in March, adding to recent signs that manufacturing is cooling.

Output at factories fell 0.1 percent after a 0.9 percent increase in February that was larger than previously reported, figures from the Federal Reserve showed today in Washington. The median estimate in a Bloomberg survey of economists called for a 0.1 percent rise. Total industrial production climbed 0.4 percent as colder-than-normal temperatures drove the biggest gain in utility use in six years.

Output is slowing as companies restrain inventory-building and global markets soften at a time the U.S. is poised for a projected easing in second-quarter growth as automatic cuts in planned federal spending take effect. Companies such as rail-car maker Greenbrier Cos. expect a better second half, a sign business investment is unlikely to retrench.

“The prior month was very strong so there is probably a return to more normal growth,” Josh Dennerlein, an economist at Bank of America Corp. in New York, said before the report. “The next couple of months are when we could see some weakness as the hit from the sequestration trickles through the economy.” Even so, “manufacturing is still going to be growing,” he said.

The median estimate for total industrial production of the 82 economists surveyed by Bloomberg called for a 0.2 percent gain. Projections ranged from a drop of 0.5 percent to an increase of 0.7 percent. The prior month was revised up to a 1.1 percent increase from a previously reported 0.8 percent advance.

Manufacturing Production…”

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