American industrial production increased in April led by a surge in manufacturing for automobiles and consumer goods.
The output of U.S. factories, mines and utilities rose 1.0 percent last month following a 0.4 percent gain in March, according to Commerce Department data on Tuesday. The median forecast has been for a more modest 0.4 percent increase.
Factory production also vaulted 1.0 percent in April after a 0.4 percent decline the previous month. The 1.4 percent month to month jump in the manufacturing sector was the largest in just over three years, since a 2.1 percent gain from January to February 2014.
Capacity utilization, the percentage of the U.S. industrial plant that is in use each month rose to 76.7 in April from 76.1 in March. It was best reading since August 2015 and well ahead of the 76.3 median prediction.
The gains in industrial production and manufacturing in the opening month of the second quarter are sharp reversal from their nearly stagnant condition in the first three months of the year. In January, February and March industrial and manufacturing production managed just a 0.1 percent increase for the quarter this helped to limit overall economic growth to 0.7 percent annualized rate.
If this manufacturing strength is maintained in the next months it would indicate that the slowdown in the first quarter was, as the Federal Reserve has averred, a temporary phenomenon and that improving global growth, a strong American labor market and returning business investment will be sufficient to booster U.S. economic activity for the rest of the year.
Automobile production climbed 5 percent in April. Industrial production outside of automobiles and parts increased 0.7 percent as it did in March. The manufacture of consumer goods advanced 1.5 percent, the best gain since November 2014. Machinery manufacturing rose 0.9 percent.
Utility output increase 0.7 percent in April after jumping 8.2 percent in March, as continental U.S. temperatures returned to seasonal norms. Mining, which includes oil and shale oil production rose 1.2 percent, fronted by gains in coal mining and drilling. Oil and gas drilling, primarily shale production soared percent.
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