Will U.S. Industrial Production Lead Economic Growth?
Industrial production rose 0.4 percent month over month in March, according to data released by the Federal Reserve on Tuesday. This figure compares against the 1.1 percent increase reported in February, and it was slightly above consensus estimates for a 0.2 percent increase.
The Federal Reserve’s industrial production index is broken down into three major industry groups. The index and all of its components are pegged to a 2007 level of 100. The most-watched segment is manufacturing, which declined 0.1 percent last month to a level of 95.7. Significantly, the output of motor vehicle parts increased. Total vehicle assemblies rose 3.4 percent to an annualized rate of 11.05 million.
The mining segment declined 0.2 percent to 115.9, while utilities led the charge higher by increasing 5.3 percent to 105.8. The surge in utilities was attributed to an unseasonably high demand for heating in March.
The Fed reported that the “rate of capacity utilization for total industry moved up in March to 78.5 percent, a rate that is 1.2 percentage points above its level of a year earlier but 1.7 percentage points below its long-run (1972–2012) average.”
Capacity utilization for manufacturing in March moved down 0.2 percentage point to 76.4 percent, a rate that is 12.4 percentage points above the trough hit in June 2009 but still 2.3 percentage points below its long-run average. Capacity utilization in mining declined 0.4 percentage point to 87.5 percent in March and was 0.2 percentage point above its long-run average.