updated 2/18/2009 9:50:40 AM ET 2009-02-18T14:50:40

Big industry production throttled back in January due partly to auto shutdowns, and housing construction tumbled to a record low, weaker-than-expected performances that show the country caught in a worsening economic tailspin.

Major Market Indices

The Federal Reserve reported Wednesday that production at the nation's factories, mines and utilities fell 1.8 percent last month. Many economists expected a 1.5 percent decline. It marked the third straight month where production was cut back and December's performance was even weaker than initially reported, plunging 2.4 percent.

Another report from the Commerce Department said construction of new homes and apartments plunged 16.8 percent in January from the previous month, to a seasonally adjusted annual rate of 466,000 units, a record low. Analysts expected a pace of 530,000 housing units.

Analysts are hoping that a boost from government programs, including new White House efforts to stem foreclosures, will help stop the slide.

The pair of reports underscored the growing toll wrought by a trio of crises — housing, credit and financial — that are the worst since the 1930s.

Many economists believe the current January-March quarter will be the worst of the recession in terms of lost economic activity. The economy contracted at a pace of 3.8 percent in the fourth quarter of last year and is probably shrinking at a pace of 5 percent or more now, analysts said.

The economy is expected to remain feeble this year, with unemployment rising, even with the stimulus package of tax cuts and increased federal government spending signed into law by President Barack Obama on Tuesday.

The Fed's report showed that factory production dropped by 2.5 percent in January. Shutdowns at plants making autos and related parts figured prominently in that decline. Output at mines fell 1.3 percent last month, while production at utilities rose 2.7 percent.

Manufacturers have slashed production and payrolls as they scramble to survive the economic fallout. The collapse of the U.S. housing market has especially sapped demand for all kinds of building materials and equipment, as well as a range for a consumer goods, including furniture, carpet and household appliances.

With consumers in the U.S. and overseas retrenching, manufacturers have been clobbered. Pushed to the financial edge, Detroit automakers General Motors Corp. and Chrysler LLC are racing to restructure in hopes of securing billions more in federal aid.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 5.03%
$30K home equity loan FICO 5.68%
$75K home equity loan FICO 4.87%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com