WASHINGTON – U.S. factories produced less in May than April, as automakers cut back on output for the first time in six months. The report indicates that manufacturing, a key driver of the economic growth, is slowing.

The Federal Reserve said Friday that factory output declined 0.4 percent last month, after increasing 0.7 percent in April. Auto production fell 1.5 percent, the first drop since November.

Overall industrial production, which includes mines and utilities, dipped 0.1 percent, after a solid 1 percent rise in April. Both mines and utilities increased production.

The production of computers, machinery, and aircraft all declined. The output of appliances also fell, while home electronics was unchanged from April.

The report “is another illustration of how rapidly the economy has lost momentum after a very strong start to the year,” said Paul Ashworth, an economist at Capital Economics, in a note to clients.

Automakers ramped up output over the winter, boosting overall factory production. Auto production jumped at an annual rate of 41 percent in the first three months of the year.

Manufacturing, meanwhile, rose nearly 10 percent on an annual basis in the same period. Car sales rose sharply earlier this year but slowed in May.

Ashworth noted that average manufacturing output rose in the past three months at only a 2.4 percent annual rate. He blamed the European financial crisis and slower growth in China, India and other emerging markets for hurting U.S. exports of factory goods.

The economy has slumped this spring after a promising winter. Hiring has sputtered and confidence has fallen. Consumers are spending less, which has slowed factory production.

 

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