The United States' factories, mines and utilities operated in May at their slowest pace in more than 17 years, the Federal Reserve said today in a report reflecting the weakness in the factory sector.
US industrial capacity in use fell to 77.4 per cent, the lowest since August 1983, when was at 77.0 per cent, the Fed said.
Industrial production slipped 0.8 per cent, its eighth consecutive monthly fall. Factory production, the largest component of overall industrial output, fell 0.7 per cent in the month, driven lower by declines in most major categories.
The decline was larger than Wall Street analysts had been expecting and underscores the fragile position of the US manufacturing sector, which has been shedding workers at a rapid pace during the current economic slowdown. Factory payrolls slipped by 124,000 in May.
The drop may also put more pressure on Federal Reserve policymakers when they meet later this month to set interest rate policy. Most observers expect the central bank to cut interest rates by at least a quarter percentage point.