US Industrial Production extends steady decline in March, pick up anticipated shortly

Industrial output declined 0.6 per cent in March after dropping 0.6-per-cent drop in February, the Federal Reserve said on Friday. Industrial production has fallen in six of the last seven months. Economists had forecast industrial output falling only 0.1 per cent last month.

Industrial production fell at an annual rate of 2.2 per cent in Q1 after decreasing at a 3.3-per-cent pace in Q4 2015. Industrial capacity use in March fell to its lowest level since August, 2010. The economy grew at a 1.4-per-cent rate in the fourth quarter and growth estimates for the first quarter are as low as a 0.2-per-cent annualized rate.

A slowing global economy and robust dollar have eroded demand for U.S. manufactured goods and undermined the U.S. industrial sector. A rebound in growth is, however, anticipated despite other data on Friday showing further erosion in consumer sentiment in early April.

“It is likely the inventory correction and stronger dollar continued to weigh on the output data for the first quarter, and we remain hopeful that the worst of the drags from these factors have passed and that activity will pick up shortly,” said Daniel Silver, an economist at JPMorgan in New York.