U.S. Industrial Production Jumps at Fastest Pace in More Than a Year
April’s 0.7% increase stems mostly from better weather
Industrial production—a measure of everything made by factories, utilities and mines—surged 0.7% in April, the Federal Reserve said Tuesday. That marked the biggest jump for a single month since November 2014.
Utilities drove the increase, boosting output by nearly 6% to respond to higher demand for electricity and natural gas. The Fed attributed the jump to a return to normal weather in April after a warmer-than-usual March.
Factory output—the biggest component of overall production and a good measure of the economy’s health—grew 0.3% in April after falling by the same pace in March. Demand for big-ticket items such as machinery and cars picked up last month.
Mining output, meanwhile, fell a sharp 2.3% last month because of persistent woes in the energy and coal sectors.
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Industrial production fell 1.1% in the 12 months through April. Manufacturing output grew 0.4% over the year, as did utility output. Mining output declined 13.4%.
Overall output had fallen broadly since last summer. Factories cut back production because of weak demand for products, as the strong dollar drove up the price of U.S. exports in foreign markets, and weak global demand cut into sales. Drilling in the energy and coal sectors has fallen sharply, affecting mining and factory output.
Nonetheless, the economy appears poised for stronger, though still modest, growth this spring, due largely to a rebound in oil prices this year and a weakening of the dollar against other currencies.
The economy grew at just a 0.5% annual rate in the first quarter. Many private-sector forecasts expect growth to rebound to between 2% and 2.5%, annualized, in the current quarter. The Atlanta Federal Reserve estimates growth of 2.8%.
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