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NEW YORK - US industrial output fell in January and the number of Americans filing for jobless benefits jumped sharply last week, according to a flurry of reports that raised doubts about the economy's health.
Massive cutbacks in the car sector were the primary culprit for the 0.5 per cent overall decline in industrial production, the largest one-month drop since September 2005.
A survey of Mid-Atlantic manufacturers suggested things were not getting any better this month, showing activity in the region was essentially at a standstill.
Winter storms were partly to blame for the longer unemployment lines, but even so some economists said the level of claims - the highest since November - was alarming.
"We came out of 2006 with a head full of steam and now it looks like we're running out of gas," said Richard Yamarone, chief economist at Argus Research.
Fears of further weakness might explain why foreigners were proving reluctant to pump cash into the United States. Treasury Department data showed the first net outflow of capital from the country in nearly two years, totalling US$11 billion ($15.8 billion) in December.
The news was not all bad. An index of homebuilder sentiment jumped unexpectedly to its highest level since June of last year as low mortgage rates helped boost demand.
The softer data also helped assuage concerns about inflation, raising hopes the Federal Reserve may be able to start reducing interest rates sooner rather than later.
- REUTERS
