U.S. Production fell for the second consecutive month in February, offering further evidence of a sharp slowdown in economic growth at the start of the first quarter.
The Federal Reserve said on Friday that production output fell 0.4 percent last month, driven by a decline in motor vehicle, machine and furniture production. January data were revised to show that factories' production declined by 0.5% instead of decreasing by 0.9%, as reported earlier.
Economists surveyed by Reuters predicted production would grow by 0.3% in February. Factory production increased by 1.0% in February a year ago
Motor vehicles and parts fell 0.1
Production decline in February added to soft reports ranging from retail sales to housing, suggesting that the economy has lost a significant pace in beginning of the first quarter. Goldman Sachs predicts gross domestic product will grow 0.6% yoy in the first quarter. The economy grew by 2.6% faster in the fourth quarter.
Manufacturing activity, accounting for about 12 percent of the economy, loses its steam as capital spending from the $ 1.5 trillion tax cut last year disappears. The business is also crossing a trade war between the United States and China, as well as last year's leap of the dollar and mitigating global economic growth that is causing export damage.