U.S. industrial production dropped by a bigger-than-expected 1.8 percent in January, Federal Reserve data showed on Wednesday, hurt by a steep drop in auto production as vehicle sales slumped. Economists polled by Reuters had expected a 1.5 percent decline in January after a revised 2.4 percent drop the month before, initially reported as a 2 percent decline. Compared with January 2008, industrial production was down 10 percent. "A plunge in motor vehicle and parts production that resulted from extended plant shutdowns subtracted more than 1 percentage point from the change in manufacturing production," the central bank said. The overall capacity utilization rate fell to 72 percent, which was 8.9 percentage points below the average from 1972 to 2008. Manufacturing capacity utilization fell to 68 percent, the lowest since the data series began in 1948.

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