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Industrial output edges up
U.S. factories busier than expected in February, though still not close to using all their capacity.
March 14, 2003: 9:36 AM EST

NEW YORK (CNN/Money) - Industrial production in the United States rose in February, the Federal Reserve said Friday, defying analysts' expectations that a sluggish broader economy would lead to a decline.

The Federal Reserve said production rose 0.1 percent after rising a revised 0.8 percent in January. Capacity utilization -- the percentage of production capacity manufacturers actually use -- stayed at just 75.6 percent.

Economists, on average, expected industrial production to fall 0.1 percent and capacity use to drop to 75.5 percent, according to a Reuters poll.

The report had little impact on U.S. stock prices, which were slightly higher in early trading. Treasury bond prices also rose.

The U.S. manufacturing sector has been struggling to recover from a long decline that began even before the March 2001 start date of the broader economic recession.

After a rebound last year, recent measures of industrial output from national and regional purchasing managers have showed sluggish activity in February, coinciding with higher oil prices, falling consumer confidence, a weakening labor market, bad weather and worries about war in Iraq.

The Fed said output of consumer goods fell 0.3 percent in February, led by a 1.4-percent drop in durable goods, which itself was led by a 2.2-percent drop in motor vehicle production. Automakers, hurt by lower sales in February, recently announced plans to cut back on production.

Consumer energy output rose 1.1 percent, reflecting higher sales of residential electricity and natural gas.

Output of business equipment was flat and has fallen 2.4 percent from a year ago. The Fed's index for information processing equipment output rose to its highest level in 15 months but still was more than 15 percent below its January 2001 peak.

The index for defense and space equipment moved up in February and has risen 4.6 percent in the past twelve months.  Top of page

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