Manufacturing in contraction

 The reports on Friday extended the streak of weak data and underscored the Federal Reserve’s “patient” stance towards further interest rate increases this year. Fed officials are scheduled to meet next Tuesday and Wednesday to assess the economy and deliberate on the future course of monetary policy. The U.S. central bank raised rates four times last year.

“The economy is spinning its wheels and not gaining any traction yet in this soft patch produced by trade wars and stock market turbulence and the government shutdown,” said Chris Rupkey, chief economist at MUFG in New York.
“Thank God Fed officials were smart enough to take their foot off the rate hikes accelerator.”
The Fed said manufacturing production dropped 0.4 percent last month, held down by declines in the output of motor vehicles, machinery and furniture. Data for January was revised up to show output at factories falling 0.5 percent instead of slumping 0.9 percent as previously reported.

It was the first back-to-back decline since mid-2017.