The pace of industrial production continues to decline.

The Federal Reserve reports that overall industrial production fell 0.6 percent in February, higher than the consensus expected decrease of 0.4%. Capacity utilization fell for the sixth consecutive month to 79.4%. It is widely expected that the Federal Reserve will cut interest rates by 50 basis points at its March 20th meeting in an effort to stimulate the faltering economy.

All subgroups declined in February, with utilities registering the sharpest production fall of 2.3%. Manuafcturing's decline of 0.4% reversed the slight improvement shown in January. Both durable and non-durables production registered similar declines.

Industry Groups
Manufacturing output dropped 0.4 percent in February, with a 0.3 percent decrease in the production of durable goods and a 0.2 percent decrease in nondurable goods. The index for consumer goods fell 0.5% in February; the production of nondurables decreased 0.7%, while the output of durables rose 0.5%. The output of nondurable consumer goods was pulled down by declines in the production of clothing, paper products and energy products. The production of consumer durables rebounded slightly; a downturn in motor vehicle output had contributed to the driopoff registered in the past four months.
The output of business equipment slipped 0.3% in February. The index for industrial and other equipment dropped 1.0% with declines in machinery and construction equipment more than offsetting a rise in farm equipment. Information processing equipment, including computers, registered a modest gain of 0.7%.

The factory operating rate declined to 78.1 percent inFebruary, 3 percentage points below its 1967-2000 average and the lowest level since late 1991. Capacity utilization in the high-tech industries dropped to 80.6% in February, or 9.4% below its July 2000 peak. The utilization rate for the primary processing industries fell 0.9% to 78.8%, while the rate for advanced processing in dustries fell 0.4% to 78.4%. The operating rate for utilities fell again to 90.4% from its high of 96.3% in December. The operating rate for mining declined slightly to 88.2%.

Monthly Reports

Industrial Production Index             1992=100
*revisions possible for previous months
  Nov. Dec. Jan. Feb.
Total Index 148.2 147.7 146.8 146.0
Manufacturing 154.1 152.9 152.0 151.3
     Durable 196.7 195.5 193.4 192.6
     Nondurable 115.5 114.4 114.4 113.9
Utilities 121.9 129.4 125.5 122.6

Market Groups, Losers and Gainers

Industrial Production
*revisions possible for previous months
  Nov. Dec. Jan. Feb.
143.6 140.8 132.4 134.7
138.5 139.0 140.1 140.1
261.9 262.2 259.3 258.2
Basic Metals 127.3 126.3 123.5 122.8
Semiconductors 2327.1 2385.2 2394.2 2401.1