Manufacturing Struggles in U.S. With Dollar Surging, Oil Falling
Source: Bloomberg
9:15 AM EDT
April 15, 2015
American factories produced more cars in March and little else as a strong dollar hampered exports and the plunge in oil prices cut into spending on new equipment.
The 0.1 percent gain in manufacturing output marked the first advance in four months and followed a 0.2 percent February decrease, according to Federal Reserve data issued Wednesday in Washington. Total industrial production dropped more than forecast. Other reports showed homebuilders gained confidence at the start of the second quarter, while factories in New York struggled.
Manufacturing, which accounts for about 12 percent of the economy, will probably remain subdued as the effects of the dollar and fuel costs linger, even as the supply disruptions caused by the labor dispute at West Coast ports and harsh winter weather dissipate. That’s one reason economists predict Fed policy makers will be in no rush to raise interest rates.
“The dollar is a wet blanket on manufacturing,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “If the dollar remains this strong, we’re going to have headwinds for manufacturing for a while.”
Read more: http://www.bloomberg.com/news/articles/2015-04-15/factory-production-in-the-u-s-barely-rises-on-rebound-in-autos
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