WASHINGTON — The latest snapshots of economic activity Friday gave Federal Reserve policy-makers more reasons to cut interest rates at their meeting Tuesday.

        Wholesale prices were almost flat in February, and factory production remained in free-fall.

        With inflation posing little current risk to the economy, analysts said, the Fed has plenty of room to lower rates again. Not only should that give a boost to the overall economy, it also should help manufacturing, they said. That sector is bearing the brunt of the economy's weakness, so much so that many think it is in recession.

        “The rot is spreading in manufacturing,” said David Wyss, chief economist at Standard and Poor's DRI. Mr. Wyss and other economists bet the Fed will cut interest rates by three-quarters of a percentage point.

        The tame inflation news came in a Labor Department report that showed the Producer Price Index, which measures inflation pressures before they reach stores, edged up just 0.1 percent in February, despite higher prices for natural gas and other energy products.

        Excluding volatile energy and food prices, wholesale prices fell by 0.3 percent last month, the best showing since August 1993.

        Meanwhile:

        • Production at factories, mines and utilities plunged a bigger-than-expected 0.6 percent, the fifth straight monthly decline, the Fed said. • Operating capacity fell to 79.4 percent in February as companies cut production and workers due to sagging demand. It was the lowest reading since February 1992.

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