WASHINGTON (Reuters) - Industrial production dropped at the sharpest rate in four months during February and the nation’s mines, factories and utilities ran at their slowest rate in more than two years, the Federal Reserve said on Monday.
Total industrial output fell 0.5 percent in February -- much steeper than Wall Street economists’ forecasts for a 0.1 percent decline -- after rising a slim 0.1 percent in January.
It was the biggest drop in monthly output since a 0.6 percent tumble last October.
The latest data on production was consistent with a sharply slowing economy that many analysts say may already be in recession.
The capacity utilization rate, a gauge of how busy the nation’s industries were, slowed to 80.9 percent in February from 81.5 percent in January.
It was the slackest rate of overall capacity use since 80.7 percent in November 2005 and well under economists’ expectations that businesses would run at an 81.3 percent rate.
The Fed said much of the unexpectedly steep fall in overall February production stemmed from a weather-related drop in utilities output, which plunged 3.7 percent after rising 2.2 percent in January.
But the manufacturing sector also weakened. Production by manufacturing businesses fell 0.2 percent after being flat in January.
That left the manufacturing sector operating at its weakest rate since late 2005, at 79.3 percent of capacity compared with 79.6 percent in January. The last time the factory operating rate was lower was in October 2005 when it was at 79.2 percent.
The rate of motor vehicle assemblies slipped to 10.08 million a year from 10.17 million in January, the Fed said.
Reporting by Glenn Somerville, Editing by Chizu Nomiyama