The Federal Reserve reported on Wednesday the U.S. industrial production reduced 5.4 m-o-m in March, following a revised 0.5 percent m-o-m decline in February (originally a 0.6 percent m-o-m gain). That was the largest drop since January 1946.

Economists had forecast industrial production would decrease by 4.0 percent m-o-m in March.

According to the report, the COVID-19 pandemic led many factories to suspend operations late in the month, causing the March decline in total industrial production. Manufacturing output fell 6.3 percent m-o-m, the most since February 1946, as most major industries recorded decreases, with motor vehicles and parts posting the largest decline. In addition, the indexes for utilities and mining dropped 3.9 percent and 2.0 percent, respectively.

Capacity utilization for the industrial sector decreased 4.3 percentage points m-o-m to 72.7 percent in March. That was 4.3 percentage point below economists' forecast and 7.1 percentage points below its long-run (1972-2019) average.

In y-o-y terms, the industrial output fell 5.5 percent in March, following a flat performance in the prior month. That was the biggest decline since November 2009.