Two more grim news items hit the stands today. Please consider U.S. Industrial Production Fell 1.4% in February.
Industrial production fell in February for the fourth consecutive month as auto cutbacks and collapsing exports hurt the broader U.S. economy.
Output at factories, mines and utilities dropped 1.4 percent last month, more than forecast, after a revised 1.9 decline in January, the Federal Reserve said today in Washington. The amount of factory capacity in use slumped to 70.9 percent, matching the lowest level on record.
The worst financial crisis in seven decades has choked off credit to consumers and businesses worldwide, leading to a slump in sales of cars, houses, airplanes and computers. Boeing Co. and United Technologies Corp. are among companies that have announced thousands of jobs will be cut to trim costs as the global economy contracts.
“The industrial sector is still struggling with a glut of inventories and both employment and production are likely to continue to fall,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York. “We’re not out of the woods yet.”
In the 12 months ended in February, industrial output was down 11.2, the biggest year-over-year decline since 1975.
New York Manufacturing Index At Record Low
Bloomberg is reporting New York Manufacturing Index Slumped to Record Low.
Manufacturing in New York contracted in March at the fastest pace on record as orders, sales and inventories plunged.
The Federal Reserve Bank of New York’s general economic index dropped to minus 38.2, the lowest level since data began in 2001, from minus 34.7 in February, the bank said today. Readings below zero for the Empire State index signal manufacturing activity is shrinking.
The measure of new orders decreased to minus 44.8 and a gauge of shipments fell to minus 26.7, the lowest levels on record. The index of inventories decreased to minus 27, the weakest since August 2001, from minus 8.1.
The index of prices paid dropped to minus 14.6 from minus 13.8, and the gauge of prices received decreased to minus 23.6 from minus 20.7. A measure of employment improved to minus 38.2 from minus 39.1.
Factories in the state turned optimistic about the future. The gauge measuring the manufacturing outlook for six months climbed to 3.1, the first positive reading in three months, from minus 6.6.
Economists surveyed by Bloomberg News March 2 to March 9 projected the U.S. jobless rate will reach 9.4 percent this year and the economy will shrink 2.5 percent.
The global economy is likely to contract this year for the first time since World War II, and trade will decline by the most in 80 years, the World Bank said last week without providing a specific estimate.
So far, the stock market seems to be shrugging off the bad news but once again the treasury market (specifically long dated treasuries) is taking it on the chin. If the S&P; can hold the gains, it will be the 5th consecutive advance.
Mike “Mish” Shedlock
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