US manufacturing falls in April, total Q1 output plunges from 2018

WASHINGTON: US manufacturing declined sharply in April, and the economy's total industrial output for the first three months of the year were far worse than originally reported, the Federal Reserve said Wednesday.

Amid a bitter trade war with China, and with the pain reflected across in multiple sectors, industrial output in the first quarter plunged 1.9 percent compared to the same period of last year, according to the latest data, revised from a dip of just 0.3 percent reported last month.

In April alone, total output fell 0.5 percent, driven by a decline of the same magnitude in manufacturing, as vehicle production continued to slip.

Economists had been expecting a 0.1 percent gain in industrial production for the month.

President Donald Trump has repeatedly touted the strong first quarter growth figures as proof his economic policies and tough trade tactics are producing results.

However, economists have long cautioned that the data include troubling signs that could point to a coming slowdown, especially as the short-term burst from the 2017 tax cuts fades away and higher tariffs bite.

In the key manufacturing sector, industries that saw declines of more than two percent compared to March included motor vehicles and parts, machinery, and electrical equipment and appliances.

Manufacturing is 0.2 percent lower than April 2018, while total industrial production remains 0.9 percent higher.

Mining output, which includes oil and gas, rebounded after three months of declines, with a 1.6 percent increase in the month, while utilities output fell 3.5 percent as heating demand declined with the warmer weather.

Industrial capacity in use in use in April continued its string of declines, dipping to 77.9 percent from 78.8 percent due to a dip in utilization for manufacturing, including another two-point decline in the troubled auto sector.