Partly reflecting a sharp pullback in utilities output, the Federal Reserve released a report on Wednesday showing that U.S. industrial production fell by more than expected in the month of March.
The Fed said industrial production fell by 0.6 percent in March after inching up by 0.1 percent in February. Economists had expected production to drop by 0.3 percent.
The bigger than expected decrease in production was partly due to a steep drop in utilities output, which plunged by 5.9 percent in March after surging up by 5.7 percent in February amid unseasonably cold temperatures.
Mining output also extended a recent downtrend during the month, sliding by 0.7 percent in March following a 1.6 percent drop in February.
On the other hand, the report said manufacturing output inched up by 0.1 percent in March, reflecting the first increase since November.
The modest increase in factory output came on the heels of a 0.2 percent drop in February as well as a revised 0.6 percent decrease in January.
Compared to the same month a year ago, industrial production in March was up by just 2.0 percent, reflecting the slowest rate of growth since July of 2013.
Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, this data point just further confirms the soft Q1 for the U.S. economy and we'll see what kind of rebound we'll see in Q2, which should happen with the degree being the only question."
The report also showed that the capacity utilization rate fell to 78.4 percent in March from 79.0 percent in the previous month. Economists had expected capacity utilization to dip to 78.7 percent.
Capacity utilization in the utilities sector showed a sharp pullback, tumbling to 80.0 percent in March from 85.1 percent February. The Fed said capacity utilization in the mining sector also slipped to 84.4 percent from 85.4 percent, while capacity utilization in the manufacturing sector was unchanged at 77.1 percent.
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