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The numbers: Industrial production was strong just before the coronavirus outbreak, data from the Federal Reserve showed Tuesday. Industrial rose 0.6% in February after a revised 0.5% drop in the prior month, the Fed said. The gain in February was above Wall Street expectations of a 0.5% rise, according to a MarketWatch survey. The government’s February employment report included a strong gain in hours worked by factory production workers, indicating strength in output in the month.
What happened: Manufacturing output rose 0.1% in February. The gain was led by a 3.5% rise for output of motor vehicles and parts.
Mining output fell 1.5% in February, a sign of weakness in the energy sector. Utility output rose 7.1%.
Capacity utilization rose to 77% in February from 76.6 in the prior month. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities.
The big picture: Early data from March suggests that manufacturing “has plunged headlong into deep recession,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. The headline of the New York Fed’s Empire State survey plummeted a record 34.4 points to -21.5, a level last seen during the financial crisis.
Market reaction: U.S. stock futures were volatile overnight after the Dow Jones Industrial Average DJIA, -0.39% plunged 2,997.10 points, or 12.9% in Monday.
