US manufacturing flat in March, capping weak Q1
American manufacturing was flat in March, which was good news after sharp declines in the prior two months that combined for a dismal first quarter, the Federal Reserve reported Tuesday.
That weak performance has contributed to fears about a slowing US economy, as fuel from the late 2017 tax cuts faded and as the auto industry continues to struggle. It also dragged overall industrial production down slightly in the month.
Manufacturing fell 1.1 percent in the first three months of the year compared to the same period of 2018, the Fed reported. However, output in March was still 1.0 percent higher than a year earlier.
The production of motor parts and vehicles plunged 2.5 percent in the month and collapsed 12.8 percent in the first quarter, according to the data, meaning it is 4.5 percent below the March 2018 output level.
Wood products also fell more than 2 percent compared to February, while only computer and electronic products and primary metals had gains of over 1 percent in the latest month.
Overall industrial output fell 0.3 percent in the first quarter, after a 0.1 percent dip last month, but is up 2.8 percent compared to March 2018.
Economists had been expecting a 0.2 percent gain for the month.
U.S. manufacturing mired in soft patch in first quarter
WASHINGTON (Reuters) – U.S. manufacturing output was unchanged in March after two straight monthly declines, resulting in the first quarterly drop in production since President Donald Trump was elected.
The weakness in manufacturing reported by the Federal Reserve on Tuesday is in tandem with a moderation in the broader economy, and is despite the White House’s “America First” policies, including trade tariffs aimed at protecting domestic factories from what Trump says in unfair foreign competition.
Soft manufacturing and slowing economic growth reflect the ebbing stimulus from a $1.5 trillion tax cut package and supply chain disruptions caused by Washington’s trade war with China.