Industrial production continued to decrease in the month of March, according to a report released by the Federal Reserve on Wednesday, with a notable decline in mining output contributing to the bigger than expected drop.
The report showed that industrial production fell by 1.5 percent in March, matching the decrease that was reported for the previous month. Economists had been expecting a somewhat more modest decrease of about 0.9 percent.
While production in the manufacturing sector fell by 1.7 percent, the Federal Reserve noted that the output of motor vehicles and parts advanced slightly in March.
As mentioned above, a 3.2 percent decrease in mining output contributed to the bigger than expected drop in industrial production, with the decrease reflecting a continued drop in oil and gas well drilling.
On the other hand, the report showed that utilities output rose 1.8 percent in March after falling 7.7 percent in the previous month. The rebound came amid a return to more seasonal temperatures after a relatively mild February.
The Federal Reserve also said that the rate of capacity utilization fell to 69.3 percent in March from a revised 70.3 percent in February.
While capacity utilization in the manufacturing and mining sectors fell to 65.8 percent and 83.8 percent, respectively, capacity utilization in the utilities sector edged up to 80.5 percent.
In other economic news, the Labor Department said its consumer price index edged down 0.1 percent in March following a 0.4 percent increase in February. The modest decrease came as a somewhat of a surprise to economists, who had expected prices to edge up 0.1 percent.
With the modest monthly decrease, consumer prices were down 0.4 percent compared to the same month a year ago, marking the first year-over-year decrease in consumer prices since August of 1955.
A steep drop in energy prices contributed to the unexpected monthly decrease in consumer prices, with energy prices falling by 3.0 percent in March after rising 3.3 percent in February.
Excluding food and energy prices, the core consumer price index rose 0.2 percent for the third consecutive month. Economists had been expecting a 0.1 percent increase in core prices.
Separately, while a report released by the New York Federal Reserve on Wednesday showed that regional manufacturing activity has continued to deteriorate in the month of April, the pace of contraction slowed by much more than expected.
The report showed that the index of activity in the sector rose to a negative 14.7 in April from a negative 38.2 in March, with a negative reading indicating a contraction. Economists had been expecting the index to edge up to a negative 35.0.
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