Economic Buzz: US factory output dips slightly in March after recent gains

US factory production fell slightly in March after two months of strong growth, mainly due to a drop in motor vehicle output and other goods.

Manufacturing output decreased by 0.1% in March, following a revised 0.4% increase in February, according to the Federal Reserve. On a yearly basis, factory production was up 0.5% in March. For the first quarter, manufacturing grew at a 3.0% annualized rate, recovering from a 3.2% decline in the previous quarter.

Motor vehicle production dropped sharply by 3.7% after rising 2.6% in February. Output also declined in primary metals, machinery, and furniture. Durable goods production fell 0.2%, while nondurable goods edged down 0.1%. However, production of petroleum, coal, plastics, and rubber products increased.

Mining output declined 1.2% after a 2.1% rebound in February. Energy production fell 1.6%, with oil and gas drilling down 2.4%.

Utilities production dropped 2.3% as demand for heating eased, after rising 1.8% in February.

Overall industrial production fell 0.5% in March, following a revised 0.7% increase in February (previously reported as 0.2%). Compared to last year, industrial output rose 0.7%, and it grew at a 2.4% annualized rate in the first quarter.

Capacity utilization for the industrial sector slipped to 75.7% from 76.1% in February, which is 3.7 percentage points below its long-term average (1972?2025). In manufacturing, the operating rate fell by 0.2 percentage points to 75.3%, standing 2.9 percentage points below its historical average.

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