Sputtering auto production sinks U.S. manufacturing output

U.S. manufacturing fell sharply in January, led by the biggest drop in motor vehicle production since the recession, the latest indication that the economy was losing momentum. The Federal Reserve’s report on Friday came on the heels of data on Thursday showing retail sales tumbling by the most in more than nine years in December. The string of weak reports together with tame inflation are supportive of the Fed’s pledge to be patient before raising interest rates further this year. It looks like Fed officials were smart to stop their gradual rate hikes as the economy seems to have entered a soft patch, said Chris Rupkey, chief economist at MUFG in New York.