WASHINGTON (REUTERS): US manufacturing output fell in February for the third straight month as the production of automobiles and a range of goods tumbled, the latest indication of slower economic growth in the first quarter.
Activity has softened in recent months, constrained by a harsh winter, strong dollar and lower crude prices, which have forced companies in the oil field to either postpone or cut back on capital expenditure projects. Weak demand overseas and a now-settled labour dispute at US West Coast ports also was a drag.
“This is a very toxic cocktail for US manufacturing. We could see some of these headwinds lasting for a few months, the first half of the year will be quite difficult,” said Thomas Costerg, an economist at Standard Chartered Bank in New York.
The weak factory data came ahead of the Federal Reserve’s policy meeting on Tuesday and Wednesday, where economists expect officials at the US central bank to drop the phrase “patient” from their so-called forward guidance on interest rates.
Factory production slipped 0.2 per cent last month after declining 0.3pc in January, the Fed said on Monday.