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                                                                                                                                                                         Saturday 16 April 2016

US Financial Front:
Factory output drops again, but signs of stability appear 

Aluminum Bud Light bottles move along a conveyor at a plant manufacturing 16-ounce Bud-                                           currencies. That makes          trade group of purchasing
weiser and Bud Light aluminum bottles for Anheuser-Busch, in Arnold, Mo. On Friday, April 15,                                     U.S. products more ex-          managers, said that its sur-
2016, the Federal Reserve reported on U.S. industrial production for March.                                                       pensive overseas and im-        vey showed manufacturers
                                                                                                                                  ports cheaper. Meanwhile,       expanded in March.
                                                                                                        (AP Photo/Jeff Roberson)  Americans have been re-         The Fed’s industrial produc-
                                                                                                                                  luctant to spend freely this    tion report is a direct mea-
C. S. RUGABER                  malaise could brighten in       overseas growth, the strong                                        year despite steady job         sure of output rather than a
AP Economics Writer            the coming months.              dollar and sluggish con-                                           gains and lower prices at       survey.
WASHINGTON (AP) — U.S.         Factory production fell 0.3     sumer and business spend-                                          the gas pump.                   Some economists, howev-
factory output dropped         percent last month, follow-     ing at home. Automakers                                            Factory output rose just 0.6    er, noted that the surveys
in March for the second        ing a 0.1 percent drop in       cut back sharply, as sales                                         percent at an annual rate       may be a better indication
straight month as manu-        February, the Federal Re-       slowed last month after a                                          in the first three months of    of future trends.
facturers churned out          serve said Friday.              record 2015.                                                       this year. That’s below the     “This should be the final
fewer cars, metal parts        Those figures suggest that      While the dollar has slipped                                       sluggish 0.8 percent rise in    grim (industrial production)
and machinery. Yet other       American manufacturers          in recent weeks, it has risen                                      all of 2015, which was the      report,” Ian Shepherdson,
recent data suggests that      are still struggling with the   in value in the past year                                          smallest boost in output        chief economist at Panthe-
the sector’s long-running      triple whammy of weak           compared with foreign                                              since the recession ended       on Macroeconomics, “with
                                                                                                                                  in 2009.                        the next few months likely
                                                                                                                                  But Greg Daco, an econo-        to see manufacturing out-
                                                                                                                                  mist at Oxford Econom-          put rebounding modestly.”
                                                                                                                                  ics, pointed out that only      Overall industrial produc-
                                                                                                                                  about a third of manufac-       tion, which includes mining
                                                                                                                                  turing is contracting, far be-  and utilities, fell 0.6 percent
                                                                                                                                  low the one-half that typi-     for the second straight
                                                                                                                                  cally shrinks in recessions.    month. Amid lower oil pric-
                                                                                                                                  Another factory report re-      es, a sharp drop in oil and
                                                                                                                                  leased Friday suggested         gas drilling activity pulled
                                                                                                                                  that goods production in        down mining output 2.9
                                                                                                                                  the U.S. could be stabiliz-     percent.
                                                                                                                                  ing. The New York Federal       That was the sharpest fall
                                                                                                                                  Reserve’s Empire State in-      in mining output since Sep-
                                                                                                                                  dex, based on a survey of       tember 2008 when hurri-
                                                                                                                                  manufacturers in the state,     canes hurt oil and gas pro-
                                                                                                                                  rose in April to its highest    duction. Mining was also hit
                                                                                                                                  level in more than a year.      by a substantial decline in
                                                                                                                                  And earlier this month, the     coal output, which is suffer-
                                                                                                                                  Institute for Supply Man-       ing from lower natural gas
                                                                                                                                  agement, a nationwide           prices.q

US retail sales fall in March as Americans buy fewer cars 

C. S. RUGABER                  and catalog stores.             Car purchases have slowed                                          chains such as Walmart          that spending on services
AP Economics Writer            Overall retail sales fell by a  this year after reaching re-                                       and Target, also posted         has growth at a 3 percent
WASHINGTON (AP) —              seasonally adjusted 0.3 per-    cord levels in 2015.                                               higher sales.                   clip this year, offsetting
U.S.  retail  sales fell last  cent in March, the Com-         Still, there were some faint                                       The  retail  report provides    some of the weakness in re-
month as Americans cut         merce Department said           signs of consumer health in                                        the first indication each       tail.
back on their car pur-         this week, following a flat     the report.                                                        month of Americans’             “With employment gains
chases, the latest sign that   reading in February and a       Excluding autos and gas,                                           spending, which drives          still healthy and real in-
consumers are reluctant to     drop in January.                sales trends look healthi-                                         70 percent of the econo-        comes growing at a solid
spend freely.                  Americans have been more        er, rising 0.1 percent last                                        my.  Retail  sales account      pace, we expect con-
A 2.1 percent plunge in        cautious about spending         month and 0.6 percent in                                           for only about one-third of     sumption growth to re-
auto sales — the steepest      this year than most econo-      February.                                                          all spending, with services     bound further over the first
such fall in more than a year  mists expected, despite         Sales in March jumped 1.4                                          such as haircuts and Inter-     half of the year,” Murphy
— accounted for most of        steady job gains and lower      percent at home supply                                             net access making up the        said in a note to clients.
last month’s drop. But sales   gas prices. That’s a key rea-   stores, and rose at furniture,                                     other two-thirds.               Sales at gas stations rose
were weak in some other        son why analysts now think      electronics and healthre-                                          Steve Murphy, an econo-         by the most since June, re-
sectors, including clothing,   the economy barely ex-          tailers. General merchan-                                          mist at forecasting firm        flecting recent increases in
restaurants, and at online     panded in the first quarter.    dise stores, which include                                         Capital Economics, said         oil and gas prices.q
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