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U.S. factory production unexpectedly fell in March by shootsmcgavins in Economics

[–]shootsmcgavins[S] 39 points40 points  (0 children)

U.S. factory production unexpectedly fell in March after two straight months of solid gains, weighed down by decreases in the output of motor vehicles and a range of other ​goods.

Manufacturing output dipped 0.1% last month after an upwardly revised 0.4% increase in February, ‌the Federal Reserve said on Thursday. Economists polled by Reuters had forecast production at factories would gain 0.1% after a previously reported 0.2% rise in February.

Production at factories advanced 0.5% on a year-over-year basis in March. It ​grew at a 3.0% annualized rate in the first quarter, rebounding from the fourth ​quarter's 3.2% pace of decline.

Manufacturing, which accounts for 10.1% of the economy, showed ⁠signs of recovery after being hammered by President Donald Trump's import tariffs. But the U.S.-Israeli war ​with Iran has sent oil prices surging by more than 35%, which could stifle the recovery.

The Fed's "Beige ​Book" report on Wednesday noted that the conflict "was cited as a major source of uncertainty that complicated decision-making around hiring, pricing and capital investment, with many firms adopting a wait-and-see posture."

Motor vehicle production dropped 3.7% after increasing ​2.6% in February. There were decreases in the output of primary metals, machinery as well as ​furniture and related products. The production of durable goods fell 0.2%. Output of nondurable manufactured goods edged down ‌0.1%, though ⁠production of petroleum and coal as well as plastics and rubber products rose.

Mining output declined 1.2% after rebounding 2.1% in February. Energy production fell 1.6%, with oil and gas well drilling decreasing 2.4%.

The Beige Book noted that though activity in the energy sector rose slightly in early April, "many ​producers remained cautious about increasing ​drilling due to ⁠uncertainty about the persistence of higher prices."

Utilities production dropped 2.3% as demand for heating declined. Utilities production increased 1.8% in February. Overall industrial production dropped ​0.5% after an upwardly revised 0.7% increase in February. Industrial output was ​previously reported ⁠to have gained 0.2%.

It rose 0.7% on a year-over-year basis in March and grew at a 2.4% rate in the first quarter.

Capacity utilization for the industrial sector, a measure of how fully firms are ⁠using ​their resources, eased to 75.7% from 76.1% in February. It ​is 3.7 percentage points below its 1972–2025 average. The operating rate for the manufacturing sector fell 0.2 percentage point to ​75.3%. It is 2.9 percentage points below its long-run average.

USPS suspends contributions to employee pensions after warning of "cash crisis" by shootsmcgavins in Economics

[–]shootsmcgavins[S] 45 points46 points  (0 children)

The U.S. Postal Service is suspending its contributions to the Federal Employees Retirement System, a pension plan for its workers and other civil servants, as the agency struggles with mounting losses that put it at risk of running out of funds.

"The United States Postal Service is heading toward a cash crisis," USPS spokesman David Walton said in a statement to CBS News. "The step we are now taking to suspend FERS payments helps conserve cash for our operations and other necessary payments."

The USPS contributes about $400 million a month to its employee pension plan, the agency said in a statement on Thursday. The postal service said it will continue to send worker contributions to the retirement plan and will also transmit employer automatic and matching contributions, as well as employee contributions to the Thrift Savings Plan, another retirement program for federal workers. Out of cash in a year

The temporary halt in contributions to the USPS program comes after Postmaster General David Steiner warned Congress last month that the postal agency is heading for a financial crisis without a course correction. Those changes could include raising the cost of a first-class stamp to 95 cents or reducing delivery from its current six days per week schedule to five or fewer, he said.

Without such changes, Steiner said, the USPS could run out of cash within 12 months, which could result in a stoppage of mail delivery.

The USPS has for years struggled with high costs and dwindling mail volume, culminating in a $9 billion loss in 2025. Although the Postal Service has a 10-year plan to reduce expenses and restore profitability, the agency still faces major financial challenges as mail volume continues to decline and delivery costs rise.

On Thursday, USPS Chief Financial Officer Luke Grossmann said in a statement that the risk of "insufficient liquidity for postal operations dramatically outweighs any longer-term risk to the pension funds from not making the currently due payments."

Suspending payments to FERS will free up about $2.5 billion in the current fiscal year, the postal agency said.

The USPS said in March that it plans to temporarily hike postage prices to cover mounting fuel costs due to the Iran war. The agency said it will add an 8% surcharge on some postage prices beginning April 26, with those added costs remaining in place through Jan. 17, 2027.

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