U.S. Factory Output Fell in March by the Most Since 1946

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U.S. factory output dropped in March by the most since 1946 as a rolling wave of shutdowns related to the coronavirus crippled the manufacturing sector.

Production slumped 6.3% from the prior month followed a 0.1% decrease in February, Federal Reserve data showed Wednesday. The median forecast in a Bloomberg survey of economists called for a 4.1% decline. Overall industrial production — which also includes output at mines and utilities — also declined by the most since 1946.

Motor vehicle production slumped 28%, the most since January 2009, while output of machinery dropped 5.6%. Mining production fell 2% as a plunge in oil prices curtailed drilling. Utility output decreased 3.9%.





Capacity utilization, which measures the amount of a plant in use, slid to 72.7%, the lowest level since April 2010.

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Factories were among the first in the U.S. to see the economic drag from the coronavirus as manufacturers experienced both supply-chain disruptions and a collapse in demand.

The Fed adjusted the data and how it’s gathered because of the effect of coronavirus closures, making tweaks the same way it would for a hurricane or other extreme weather event. For example, researchers compiled the start dates of stay-at-home orders, assumed essential industries remained open, and used other government data to pinpoint what share of output was impacted by those orders to the county level.

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