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Industrial production fell in February

Industrial output fell in February by the biggest amount in four months, providing yet another gloomy assessment of the economy's health.
/ Source: The Associated Press

Industrial output fell in February by the biggest amount in four months, providing yet another gloomy assessment of the economy's health.

The Federal Reserve said Monday that output at the nation's factories, mines and utilities dropped by 0.5 percent in February, the biggest decline since a 0.6 percent fall last October.

It was a far weaker reading than the slight increase of 0.1 percent that many analysts had been expecting. It served to underscore the severity of the current economic slowdown.

The Federal Reserve moved aggressively over the weekend to keep a crisis in financial markets from spreading and Fed officials are expected to follow with another sizable cut in interest rates for consumers at their regular meeting on Tuesday.

However, many economists believe the moves have not come in time to keep the country out of a recession although analysts said they should limit the severity of the downturn.

The 0.5 percent drop in industrial production followed tiny increases of 0.1 percent in January and 0.2 percent in December and a more sizable gain of 0.4 percent in November which had followed the big 0.6 percent plunge in October.

For February, the weakness came from a 0.2 percent drop in manufacturing output, the biggest component of industrial production, and a sharp 3.7 percent fall in output at utilities, which was attributed to warmer-than-normal weather in February. Output in mining, which includes oil and gas drilling, was up 0.4 percent after a 1.3 percent fall in January.