Factory production in the U.S. declined in February for a third consecutive month, signaling cutbacks in manufacturing will hold back economic growth this quarter.
The 0.2 percent decrease at manufacturers followed a 0.3 percent drop in January that was initially estimated as a gain, figures from the Federal Reserve in Washington showed Monday. Total industrial production, which also includes mines and power plants, climbed 0.1 percent, propelled by a record surge in utility use as temperatures plummeted.
Delays at West Coast ports have probably disrupted supplies, while sluggish growth in foreign markets and a rising dollar that makes American products more expensive may be crimping demand. U.S. consumer spending, supported by job and wage gains, will be needed to underpin activity at factories, which are often considered economic bellwethers.
“We’re in a soft patch,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who correctly forecast the increase in the overall production gauge. As the U.S. moves into the spring and the bottlenecks caused by the port strikes abate, “the manufacturing sector might perk up a little again. I don’t think too much of this current softness should be extrapolated forward.”
Another report Monday showed manufacturing in the New York region grew this month at a slower pace than projected.
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