Production Fell For December, 3rd Time in Row --- Drop of 0.2% Raises Doubt About State of Recovery In National Economy
WASHINGTON -- Industrial production fell in December for the third consecutive month, offering bleak news on the state of America's smokestack economy.</br></br>The 0.2% drop last month followed declines of 0.2% in November and 0.1% in October, the Federal Reserve Board said. A string of strong growth numbers last spring and early summer had seemed to indicate that the industrial sector was recovering, but the more recent figures from the Federal Reserve cast doubt on that.</br></br>"This is not a free fall," said Stuart Hoffman, senior economist for PNC Financial Corp. in Pittsburgh, referring to a term President Bush used last week in New Hampshire to describe the economy. "But industrial production was a source of strength for the economy last spring, and now it is a source of weakness."</br></br>Most of the decline in industrial production last month stemmed from a 3% drop in output of utilities; unusually warm weather reduced demand for electricity. Factories posted an 0.1% gain in output after declining 0.3% the month before. The auto industry, struggling to cope with excess inventories, cut output of cars and trucks 2.3%.</br></br>Mr. Hoffman predicted that autos will continue to be a source of problems in the first quarter and will drag industrial production figures down.