THE ECONOMY

THE ECONOMY

INDUSTRIAL OUTPUT RISE

ESTIMATED FOR FEBRUARYWarm weather and automobile employees returning to work after layoffs caused February U.S. industrial production to increase 0.9 percent and capacity utilization to rise to 82.5 percent from January's 81.9 percent, according to the average forecast of 10 economists surveyed by Knight-Ridder

Financial News.

The Federal Reserve Board's capacity utilization and industrial production reports are scheduled to be released today.

''February industrial production and capacity utilization should feature reboundingoutput in the auto sector, which returned to work after January's mass layoffs," said Samuel Kahan, chief economist with Fuji Securities Inc.

INITIAL JOBLESS CLAIMS

DOWN IN LATEST WEEK

WASHINGTON - New claims for state unemployment insurance benefits were made by 343,000 people during the week ended March 3, down 3,000 on a seasonally adjusted basis from the previous week, the U.S. Labor Department said Thursday.

Initial claims were down 16,000 in the week ended Feb. 24 to a seasonally adjusted 346,000, Labor said.

In the week ended Feb. 24, 2.265 million people were reported claiming unemployment benefits under regular state programs, down 74,000 from the previous week's 2.339 million, Labor said.

HOUSING STARTS REPORT

EXPECTED TO SHOW DROP

KANSAS CITY, Kan. - February housing starts are expected to decline sharply after record figures were established in January, lumber traders and economists said.

The average of trader estimates indicated starts would decline 11.6 percent to an annual rate of 1.437 million units and housing permits would fall 18.3 percent to 1.424 million.

The Commerce Department report is to be announced today.

Nearly all of the 13 traders and seven economists participating in the poll said the January figures were an aberration, with 1.625 million starts and 1.743 million permits, and February figures should return to the trend of 1.4 million.

An economist said interest rates and weak new homes sales indicated January data were unsustainable.