U.S. factories flex muscle after severe winter chill

March 17 (Reuters) — U.S. manufacturing output recorded its largest increase in six months in February. Factory production increased 0.8 percent in February after a 0.9 percent January drop.

Quite the bounce- not even back to where it was.

Motor vehicle output rebounded 4.8 percent last month after tumbling 5.2 percent in January, the Fed said in its report.

Same.

There were also notable gains in the production of machinery and fabricated metal products. Mining output rose 0.3 percent last month, but utilities production fell 0.2 percent. The rise in manufacturing and mining output helped to lift overall industrial production 0.6 percent in February. It had slumped 0.2 percent in January. The amount of industrial capacity in use increased to 78.8 percent in February from 78.5 percent. Still, it remained 1.3 percentage points below its long-run average.

Renzi tells Merkel Italy will respect EU budget rules

March 17 (Reuters) — Italian Prime Minister Matteo Renzi on Monday assured German Chancellor Angela Merkel that he aimed to accelerate growth while respecting deficit spending limits.

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Renzi last week announced a sweeping package of tax cuts, including 10 billion euros ($13.9 billion) in income-tax reductions, to help spur consumer demand, saying spending cuts and extra borrowing would fund the measures.

Since spending cuts tend to be higher multiple than tax cuts, doesn’t seem all this is likely to help, and might hurt.

“Italy is not asking to exceed treaty limits,” Renzi told reporters after his a meeting with Merkel in Berlin.

They are still a bit above the 60% debt/gdp limit…

On top of the income-tax cuts, Renzi said he would reduce a regional business tax and increase hiring flexibility for companies. Renzi said Italian debt has risen as a percentage of output in recent years even though spending has been kept in check because growth has been stagnant. Domestic demand has “collapsed,” he said.