WASHINGTON (AP) -- U.S. industrial production fell in March, pulled down by a drop in mining output. Factory output remained weak amid a slowing global economy and trade tensions with China.
The Federal Reserve says industrial output — combining production at factories, utilities and mines — slipped 0.1% in March from the previous month.
The drop occurred amid a deceleration of the U.S. economy as stimulus from last year's tax cuts faded. Growth U.S. economic output slowed to a 2.2% annual pace the last three months of 2018 from 3.4% in the third quarter and 4.2% in the second.
Mining output declined 0.8% but was up 10.5% from March 2018.
Manufacturing production was flat after dropping in January and February. In the first three months of the year, factory output fell at an annual rate of 1.1%. Production of cars, truck and auto parts dropped 2.5% in March and 4.5% over the past year.
Utility production rose 0.2% after a sharp 3.7% increase in February.
The U.S. and China have slapped tariffs on $350 billion worth of each other's goods in a dispute over Beijing's aggressive push to challenge U.S. technological dominance. President Donald Trump also has imposed import taxes on foreign steel and aluminum and is threatening to do the same for autos.
The International Monetary Fund, citing trade tensions, volatile financial markets and higher interest rates, last week downgraded its outlook for world economic growth to 3.3%, tied with 2016 as the slowest since the recession year 2009.
American manufacturers have also been dinged by a rise of more than 7% in the value of the dollar against other major currencies over the past year. A stronger dollar makes American goods pricier and less competitive in foreign markets.
"The factory sector has taken the brunt of the dislocations associated with tariffs and uncertainties around trade policy as well as dealing with the headwind of a stronger dollar," Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a research note Tuesday. "Thus, it is not surprising that manufacturing activity is underperforming the overall economy."