U.S. output, hit by Boeing troubles, slips

U.S. manufacturing output fell slightly in January, driven lower by Boeing’s decision to halt production of its troubled 737 MAX aircraft.

The Federal Reserve said Friday that factory output declined 0.1% last month after eking out a 0.1% gain in December. Excluding the production of airplanes and parts, factory production rose 0.3%.

U.S. manufacturing has shown signs of recovering from a yearlong downturn but is facing a fresh challenge from Boeing’s troubles, which also affect hundreds of suppliers. Manufacturing output is down 0.8% in the past year, hurt by the U.S.-China trade war and slower global growth.

Overall industrial production, which includes output from mines and utilities, dropped 0.3% in January, held back by a 4% drop in utility production because of unseasonably warm weather.

Other reports suggest manufacturing is picking up, particularly outside aircraft production. The Institute for Supply Management, a trade group of purchasing managers, said earlier this month that factory activity expanded in January for the first time in six months.

Meanwhile, United Airlines said it is removing the grounded Boeing 737 Max until September, forcing it to cancel thousands more flights.

United, Southwest and American are bracing for a second straight summer without their Max planes. The result will be fewer flights than the airlines had planned to offer during the peak summer-travel season. That could result in slightly higher fares.