U.S. factory production rose 0.5% in April

Galtero Lara
May 17, 2018

COLD weather and strong mining activity combined with a solid showing by manufacturing firms to drive a jump in USA industrial production in April, the Federal Reserve reported on Wednesday.

"A positive backdrop that includes firm domestic and external demand, tax cuts and a less restrictive regulatory, higher energy prices and a still weak US dollar are expected to underpin average annual industrial production growth of 4.2% in 2018, much stronger than the 1.6% gain recorded previous year", he said. That marked the third straight month of higher production.

As a result, at 78.0% for April, the degree of capacity in use, one closely-followed measure of the degree of slack in the economy, fell short of economists' forecasts for a print of 78.4%.

Total industrial capacity in use in the month rose to 78 per cent, the highest since March 2015 but still almost two points below the long-run average, the Fed said.

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Utility production rose 1.9% over the month and 6% over the year.

The output gain in March was revised higher, also to 0.7 per cent, but the prior months were revised downward, meaning the production gain in the first quarter of the year was 0.6 percentage points lower than previously reported.

Mining output, lifted by higher oil prices, jumped 1.1 percent.

Production of industrial machinery jumped 2.3 percent in April, the most in seven months. Unusually cold weather in April boosted demand for heating.

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