Weak rise in US industrial output

The Fed has warned that the economic outlook is weak

US industrial production rose a meagre 0.1% in January, official figures have shown, the latest indication of weakness in the US economy.

January's data from the Federal Reserve was the same as December's figure, and in line with market expectations.

Output was mixed across the various manufacturing sectors, with carmakers and mining firms seeing production fall, while computer makers saw a rise.

Fed chairman Ben Bernanke on Thursday warned of a weaker economic outlook.

The Fed cut interest rates twice in January to try to boost the struggling economy.

'Ugly'

Keith Hembre, chief economist at FAF Advisors in Minneapolis, described the latest figures from the Fed as "ugly".

This could put additional downward pressure on the dollar Sarah Bloomfield, Centre for Economics and Business Research

"It's another recession-type reading," he said.

Other US economic data for January have been equally gloomy.

While the service sector contracted for the first time in almost five years, overall employment levels fell for the first time since August 2003.

Yet at the same time, there was a surprise rise in retail sales, which increased by 0.3%.

And some advance data on manufacturing output, the Empire State purchasing managers index produced by the New York Fed, also showed a sharp drop.

Sarah Bloomfield, economist at the Centre for Economics and Business Research, said the Fed's latest industrial production data was further evidence of the impact of the US housing slump.

"This could put additional downward pressure on the dollar," she said.