The numbers: U.S. industrial production rose 0.4% in March, the Federal Reserve reported Friday.
The gain was above Wall Street expectations of a 0.2% gain, according to a survey by The Wall Street Journal.
Key details: The increase in output was boosted by a sharp rise in utility output due to the cold temperatures. Excluding utilities, production fell 0.4%.
Manufacturing fell 0.5% in March after a 0.6% gain in the prior month. For the first quarter as a whole, manufacturing was up 0.3%. The drop was let by construction supplies, business equipment and consumer durable goods.
Output of motor vehicles was down 1.5% in March after increasing for the past two months. Excluding autos, total industrial output was up 0.5% in March.
Mining output fell 0.5% in March, and there were declines in oil and gas extraction.
Capacity utilization rose to 79.8% in March, up from 79.6% in the prior month. It was 80.5% in the same month last year. Economists had forecast a 79.1% rate.
Big picture: Industrial production looks a little stronger in the wake of this report, which incorporates annual revisions.
Industrial production was up at a 0.2% rate in the first quarter after a sharp 2.5% decline in the final three months of 2002.
What are they saying? “Weaker domestic demand is now the main headwind facing manufacturers, with higher interest rates and tighter credit conditions weighing on demand for durables,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics. “With global economic growth also likely to weaken again soon, as the temporary boosts from falling energy prices and China’s reopening fade, the US manufacturing sector will continue to struggle.”
Market reaction: Stocks
DJIA,
-0.03%
SPX,
-0.16%
were lower in early afternoon trading on Friday while the rate on the 10-year Treasury note
TMUBMUSD10Y,
3.468%
rose to 3.52%.
