U.S. manufacturing still struggling

The U.S. economy continues to show signs of weakness, as U.S. industrial production fell in March for the second consecutive month by 0.5%. The drop may partly reflect the market uncertainty as a prelude to the war in Iraq, however some economists believe the trend also reflects a fundamental weakness in the U.S. manufacturing sector, according to a report in the National Post.
One key indicator of manufacturing health, factory utilization rate, fell to a 20-year low of 72.9%, the U.S. Federal Reserve Board reported. Historically factory utilization must be in the range of 80% before the onset of any significant capital spending.
Some economists believe the recovery in the U.S. economy will be aided by president George W. Bush’s proposed multi-million dollar tax cut. The tax-cut proposal will be voted on in Congress this summer.