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US factories increase output in February
In this Monday, Sept. 14, 2015, photo, welder Gabriel Gonzalez welds a support beam at a local welding shop in Hialeah, Fla. On Wednesday, March 16, 2016, the Federal Reserve reports on industrial production for February. (AP Photo/Alan Diaz)

US factories increase output in February

WASHINGTON (AP) — U.S. factories produced more machinery, appliances and other goods last month, the second-straight increase in output and a sign manufacturing may be stabilizing after a difficult year.

The Federal Reserve said Wednesday that factory production rose 0.2 percent in February, after rising 0.5 percent the previous month. The increases in the past two months follow four declines in the previous five months.

The gains suggest that U.S. manufacturers are overcoming challenges from the strong dollar and weak overseas growth, which have cut into exports. Factories added jobs last year at the weakest pace since the recession ended in 2009.

Overall industrial production, which includes utilities and mining, fell 0.5 percent last month, the fourth drop in five months. Utility production plunged 4 percent as mild temperatures lowered demand for heat.

And mining output, which includes oil and gas drilling, fell 1.4 percent, a result of low oil prices.

The plunge in oil prices has dragged down mining output for more than a year. Mining production has fallen an average of 1.3 percent a month for the past six months, the Fed said. Oil and gas well drilling has collapsed more than 60 percent since late 2014.

Automakers trimmed output in February, after a large increase in the previous month. Clothing production jumped 3 percent.

U.S. factories had been weighed down by the strong dollar and weaker overseas growth since the beginning of last year.

A stronger dollar makes U.S. goods more expensive overseas and lowers the price of competing imports. Slower growth in China, Europe and Japan has also reduced demand for U.S. products and cut into corporate profits, which can lower business spending on big-ticket manufactured goods.

Other recent manufacturing data has also shown some recovery. The Institute for Supply Management, a trade group, said its measure of factory activity in February showed that manufacturing shrank for the fifth straight month. Yet its gauge rose to 49.5, close to a reading above 50, which signals expansion.

And orders for manufactured goods rose 1.6 percent in January, after two straight declines, a sign output could increase again in the coming months.

AP Poll: Social Security, joblessness top economic concerns.

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