A report released by the Federal Reserve on Friday showed U.S. industrial production was unexpectedly unchanged in the month of February.
The Fed said industrial production was unchanged in February following a revised 0.3 percent increase in January.
Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.
Industrial production came in unchanged as a 0.1 percent uptick in manufacturing output and a 0.5 percent advance in utilities output were offset by a 0.6 percent drop in mining output.
Oren Klachkin, Lead U.S. Economist at Oxford Economics, predicted industrial production will lose momentum later this year as the economy suffers a mild recession.
“Industrial output will struggle amid the challenges of weakening domestic demand, frail overseas demand, rising interest rates, and a strong U.S. dollar,” Klachkin said.
“Turmoil in the banking sector corroborates our view that the economy is starting to feel the effects of monetary policy tightening,” he added. “We think more Fed rate hikes in the pipeline, so risks to the outlook are tilted to the downside.”
The report also said capacity utilization in the industrial sector came in at 78.0 percent in February, unchanged from the revised figure for January.
Economists had expected capacity utilization to inch up to 78.4 percent from the 78.3 percent originally reported for the previous month.
Capacity utilization in the utilities sector crept up to 68.9 percent, while capacity utilization in the manufacturing and mining sectors dipped to 77.6 percent and 87.3 percent, respectively.