U.S. industrial production fell more than expected in March as manufacturing output dropped by the most in a year and mining maintained its downward trend, the latest indication that economic growth slowed sharply in the first quarter of 2016.
Economists say a slew of temporary factors, including problems with the model the government uses to smooth the data for seasonal fluctuations, has contributed to lowering growth in the first quarter. The government last year took steps to refine the seasonal adjustment for some components of gross domestic product, which economists said left residual seasonality in the data.
Industrial output declined 0.6% last month after dropping 0.6% drop in February, the Federal Reserve said on Friday. Industrial production has fallen in six of the last seven months. Economists had forecast industrial output falling only 0.1% last month. Industrial production fell at an annual rate of 2.2% in the first quarter after decreasing at a 3.3% pace in the fourth quarter. Industrial capacity use in March fell to its lowest level since August 2010.
Growth estimates for the first quarter are as low as a 0.2% annualized rate. The economy grew at a 1.4% rate in the fourth quarter.
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