Don’t be fooled by the headline number – there was more evidence of a spring swoon in new government data released Tuesday.

While overall industrial production rose 0.4 percent, that increase was caused by a big 5.3 percent jump in production at utilities because of the cold weather in March.

Manufacturing output, which is a more telling indicator than the headline number, actually dropped by 0.1 percent.

Many analysts, like Barclays, were looking for manufacturing output to rise slightly last month, not fall, and the bank said it was one more sign the economy was entering a weak patch after stronger growth earlier in the year.

“This adds to the picture of a softening of activity at the end of Q1, relative to the start of the year, with weaker March data now seen across retail sales, employment and output,” Barclays said in a note. “Alongside a likely softening of household sector demand (reflecting a lagged response to January tax hikes) this leads us to expect softer output growth in Q2 relative to Q1.”

Another firm, IHS Global Insight, was similarly downbeat. Still, IHS noted that auto production was one bright spot amid the overall gloom.

“As expected, motor vehicle production increased again (+2.9%) and continues to be a bright spot in the economy, even as consumers face many headwinds,” IHS said. “Vehicle production should continue to lead manufacturing higher over the coming months.”

If the economy does indeed slow, as is widely expected, many economists say the cause will be fiscal austerity in Washington. Besides the payroll tax increase at the beginning of January, experts are watching the fallout from the automatic cuts in government spending recently imposed by Congress.

More information about the broad state of the economy will be out Wednesday, when the Federal Reserve releases its Beige Book survey of economic conditions across the country.

Article source: http://economix.blogs.nytimes.com/2013/04/16/a-new-sign-of-a-swoon/?partner=rss&emc=rss