US industrial production drops 0.5%

US industrial production slipped in February, but factory output edged higher, according to the latest data from the Federal Reserve.

Industrial output fell 0.5% in February, dragged lower by utilities and mining, compared with a 0.8% rise in January. Economists had been expecting a 0.3% decline.

Total production was down 1% in February on the year, marking the fourth consecutive annual fall.

Meanwhile, manufacturing production rose 0.2% compared with a 0.5% rise in January. On the year, it was up 1.8%.

Capacity utilisation, which measures industrial slack, fell to 76.7% from 77.1% in January.

Pantheon Macroeconomics said: “We have no great hopes of a strong rebound in manufacturing, but the fading drags from falling capex in the oil sector - it has fallen so far that it cannot be as big a drag on manufacturing as last year - and the strong dollar mean that the worst probably is now over.”