U.S. manufacturing output fell for a second straight month in February and factory activity in New York state hit nearly a two-year low this month, offering further evidence of a sharp slowdown in economic growth early in the first quarter.
The reports on Friday extended the streak of weak data and underscored the Federal Reserve’s “patient” stance towards further interest rate increases this year. Fed officials are scheduled to meet next Tuesday and Wednesday to assess the economy and deliberate on the future course of monetary policy. The U.S. central bank raised rates four times last year.
The Fed said manufacturing production dropped 0.4 percent last month, held down by declines in the output of motor vehicles, machinery and furniture. Data for January was revised up to show output at factories falling 0.5 percent instead of slumping 0.9 percent as previously reported.
In a third report on Friday, the University of Michigan said its consumer sentiment index rose to a reading of 97.8 in early March from 93.8 in February. Strong consumer sentiment bodes well for consumer spending in the months ahead after spending appeared to have retrenched early in the first quarter.
“In addition to trade, risks to manufacturing stem from the labor market, as the scarce supply of workers will also limit growth,” said Stephen Ciccarella, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “We expect this headwind to intensify over the next few quarters as the labor market continues to tighten.”
Submitted March 16, 2019 at 11:40PM by COMPUTER1313 https://ift.tt/2HpYDsy
