WASHINGTON - March 17, 2009 - U.S. industrial output fell to its lowest level in almost seven years in February and manufacturing in New York state slumped further this month, according to data released on Monday that pointed to a deteriorating economy.

Adding to the economy's problems, the Treasury said foreigners were net sellers of U.S. securities in January, a worrying development at a time when the government is rolling out a massive spending plan in an effort to break the 14-month-long recession.

The Federal Reserve said industrial production fell 1.4 percent last month, following a 1.9 percent drop in January. It was also worse than market expectations for a 1.1-percent decline.

Output slid 11.2 percent compared with February 2008, with the index at 99.7, the lowest reading since April 2002, the Fed said.