US Industrial Production Rose a Sluggish 0.1 Percent in February

March 15, 2019 by Dan McCue
Federal Reserve Chairman Jerome Powell testifies on monetary policy, before the House Financial Services Committee on Capitol Hill in Washington, D.C., U.S., Feb. 27, 2018. (Olivier Douliery/Abaca Press/TNS)

U.S Industrial production rose just 0.1 percent in February, slowed by the second straight monthly decline in manufacturing activity, the Federal Reserve said Friday.

The central bank said manufacturing production dropped 0.4 percent last month, held down by declines in the output of motor vehicles, machinery, and furniture.

Data for January was revised up to show output at factories falling 0.5 percent instead of plunging  0.9 percent as previously estimated. Meanwhile factory production has slipped 1 percent during the past 12 months.

Economists said the report is further evidence of a sharp slowdown in the U.S. economy early in the first quarter.  In recent weeks, several government and independent reports have highlighted the sluggishness of home and retail sales over the winter.

On Thursday, the Commerce Department said that new homes sold at a seasonally adjusted annual rate of 607,000 in January, down from 652,000 in December.

The Fed report is also in line with the latest findings of The Institute for Supply Management, which earlier reported that factory activity is slowing.

Goldman Sachs is now forecasting the gross domestic product will rise at a 0.6 percent annual rate in the first quarter. By comparison, the economy grew at an annual rate of 2.6 percent in the fourth quarter.

According to the Federal Reserve, the manufacturing of machinery fell 1.9 percent; furniture, 1.5 percent; and motor vehicles and parts, 0.1 percent.

Utility output climbed 3.7 percent, a byproduct of people across the country using more electricity, and mining activity rose 0.3 percent.

On a much brighter note, the Labor Department reported Friday that U.S employers posted nearly 7.6 million open jobs in January, a sign that businesses are still looking for workers despite signs the economy has slowed.

Job openings reached 7.58 million in January, nearly matching the record high of 7.63 million in November 2018.

At the same time, the department said the number of people who quit their jobs picked up in January. Nearly 3.5 million people quit their jobs in January, up 2.9 percent from the previous month.

While workers leaving can be a headache for employers, economists look more positively on them, seeing them as a sign that workers are finding more attractive or higher-paying jobs.

The rate of “quits” can also push wages higher as employers are forced to pay more to prevent people from leaving.

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