Industrial production tumbled a larger-than-expected 1.1 percent in May as the recession crimped demand for a wide range of manufactured goods including cars, machinery and household appliances.
The Federal Reserve's report on Tuesday showed production at the nation's factories, mines and utilities has fallen for seven straight months.
The recession has crimped demand in the U.S. for all kinds of manufactured goods, especially those related to the housing sector. Builders have cut back on new projects as they try to winnow swollen inventories of unsold homes and deal with a glut of foreclosed properties. Factories also are coping with less demand from foreign buyers struggling with their own economic problems.
Plant shutdowns at Chrysler LLC and General Motors Corp., which recently filed for bankruptcy protection, also weighed on industrial production last month and probably will continue to do so through part of the summer, economists say.
Against that backdrop, industrial companies idled more of their plants and equipment. The overall operating rate fell to 68.3 percent in May, a record low dating to 1967.
The situation sounds bleak. What can you expect? For insights we spoke with Commerce Secretary Gary Locke. Find out what he had to say. Watch the interview now!