The Federal Reserve said the U.S. economy has remained "subdued" over the past two months as both consumers and businesses have reduced spending. The most recent beige book survey of regional economic activity by the Federal Reserve found that consumer spending remained weak and that business spending was very soft, with practically no change in capital investment or hiring plans.
Auto analysts said bad weather in February reduced total U.S. auto sales by 25,000 vehicles and they have lowered full-year U.S. automotive production projections to 16.6 million vehicles, down from 16.9 million, as a result.
General Motors said total vehicles sales fell 19% last month compared to the same period in 2002, with light truck sales falling 21% and car sales dropping 17%. GM added that it plans to cut second quarter production by 10.5% as it expects further sales declines.
DaimlerChrysler said its U.S. sales fell 4% overall, with light truck sales down 5% and car sales dropping 2%. Ford Motor Company said sales were mixed, with car sales up 3% and light truck sales down 1%.
Other economic indicators remain mixed.
According to the U.S. Census Bureau, U.S. housing starts were up only 0.2% in January, the smallest increase in several years, after climbing 4.9% in December 2002. Retail and food service sales dropped 0.9% in January after climbing 2% in December last year.
New orders for manufactured durable goods were up 3.3% in January after falling 0.4% in December 2002. Manufacturer shipments, inventories, and orders remain depressed, rising only 0.4% in December 2002 after falling 0.8% in November.
The Federal Reserve noted that U.S. Industrial production has also slowed, increased just 0.7% in January after falling 0.4% in December of last year.
