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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>US industrial production down 2.8%, biggest fall in 34 years
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->NEW YORK: Reports on industrial production and manufacturing released yesterday showed a steep economic slide in the United States.
US industrial production posted the biggest monthly decline since 1974. Adding to the gloom, manufacturing in the Philadelphia region shrank this month at the fastest pace in 18 years.
Industrial production tumbled 2.8 per cent last month, the Federal Reserve said, far worse than the 0.8 per cent decline that economists had expected. Business equipment production dropped 7 per cent, a sign that manufacturers were retrenching as the credit crisis intensified.
'Over the last three months, production is down 5.8 per cent and is consistent with a recession,' said Mr John Silvia, chief economist at Wachovia.
This month is likely to be worse.
The Federal Reserve Bank of Philadelphia's general economic index plunged to minus 37.5 this month, from 3.8 last month.
Negative readings signal contraction. The index averaged 5.1 last year.
The regional surveys provide early clues to the health of manufacturing nationwide, which accounts for about 12 per cent of the US economy.
The manufacturing surveys erased a higher opening for US stocks, a day after their worst session since the 1987 crash. They also raised expectations of a Fed interest rate cut. More reductions in production are likely as job losses and tougher lending rules hurt sales.
'We're headed for a fairly significant recession. Exports had been a big support for manufacturing but that leg is no longer available to stand on,' said Mr Guy Lebas, chief economist at Janney Montgomery Scott. REUTERS, BLOOMBERG
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->NEW YORK: Reports on industrial production and manufacturing released yesterday showed a steep economic slide in the United States.
US industrial production posted the biggest monthly decline since 1974. Adding to the gloom, manufacturing in the Philadelphia region shrank this month at the fastest pace in 18 years.
Industrial production tumbled 2.8 per cent last month, the Federal Reserve said, far worse than the 0.8 per cent decline that economists had expected. Business equipment production dropped 7 per cent, a sign that manufacturers were retrenching as the credit crisis intensified.
'Over the last three months, production is down 5.8 per cent and is consistent with a recession,' said Mr John Silvia, chief economist at Wachovia.
This month is likely to be worse.
The Federal Reserve Bank of Philadelphia's general economic index plunged to minus 37.5 this month, from 3.8 last month.
Negative readings signal contraction. The index averaged 5.1 last year.
The regional surveys provide early clues to the health of manufacturing nationwide, which accounts for about 12 per cent of the US economy.
The manufacturing surveys erased a higher opening for US stocks, a day after their worst session since the 1987 crash. They also raised expectations of a Fed interest rate cut. More reductions in production are likely as job losses and tougher lending rules hurt sales.
'We're headed for a fairly significant recession. Exports had been a big support for manufacturing but that leg is no longer available to stand on,' said Mr Guy Lebas, chief economist at Janney Montgomery Scott. REUTERS, BLOOMBERG
