U.S. Production Hits Lowest Point in Three Years

America’s factories, mines and utilities operated at just 78.9% of capacity in April, the lowest operating rate in more than three years, the government reported today.

The Federal Reserve said that the operating rate, which stood at 79.6% in February, has fallen steadily for the last two months, largely reflecting production cutbacks at auto factories.

The operating rate declined 0.4 of a percentage point in April after a 0.3 drop in March. The back-to-back declines left the operating rate at its lowest point since December, 1983, one year after the end of the 1981-82 recession.

The declines in manufacturing were widespread, led by a giant 7.3-percentage-point drop at auto factories, where the operating rate fell to 73.9% of capacity. Auto makers have been cutting back on production in the face of high levels of unsold cars.