US industrial production falls more than expected in March

Production was down 0.6% from February, which was much steeper than the 0.1% dip forecast by economists.

Industrial production slid 2% from March 2015 and for the first quarter as a whole, it fell at an annual rate of 2.2%.

The Fed said a big chunk of the overall drop last month resulted from declines in the indexes for mining and utilities, which dropped 2.9% and 1.2%, respectively.

Manufacturing output fell 0.3%, with the production of durables down 0.4%.

Capacity utilisation, which measures industrial slack, fell 0.5 percentage point to 74.8% - a rate that is 5.2 percentage points below its long-run average.

Steve Murphy, US economist at Capital Economics, said: "The miss relative to our estimate is explained by bigger than expected declines in manufacturing and mining. Nevertheless, with the manufacturing activity surveys now showing a Lazarus-like rise from the dead – illustrated today by the news that the Empire State index climbed to +9.6 in April from a low of -19.4 in January – we would expect the actual output data to rebound soon too."